Top Tips to Reduce Recruitment Costs
So, lets start with what are the true recruitment costs?
There are direct recruitment costs, such as advertising and recruitment agency fees and then there are associated recruitment costs, such as the salaries or people involved in the recruitment process and the subsequent training and development of a new hire.
There are also indirect recruitment costs, so if the successful candidate you hired was not right and leaves within the first year – plus in addition you can factor in more indirect costs if the bad hire had a negative impact on the people around them, or causes your company a loss of income or even a client as a result of the time they spent in your business.
So, lets get started on reducing recruitment costs. Firstly, it is not always about reducing spend, because you need to appreciate the long-term implications of getting it wrong. A larger advertising budget might result in more jobs being filled directly and subsequently reduce recruitment agency spend for example.
If you haven’t already, you should look to invest in a modern recruitment system like our very own cloud based candidate management system (CMS). This should cut the time it takes to hire staff and over a 12-month period, this should provide a very healthy return on investment.
When it comes to advertising solutions, there are low cost, fixed priced recruitment solutions out there for £199 that fill less than 20% of the jobs they take on, so you need to really ask are they worth entertaining, if for an extra £200 you can utilise a service like our SDW Recruit Direct solution, which fills more than 70% and even better, for an extra £550 a solution like our SDW eRecruit solution that fills just over 94% of the roles we take on.
If you are looking to use the Job Boards directly, I would strongly advertise that it’s more about choosing the right advertising channel than buying on price. Yes, you may be able to advertise on Monster for a lot less than reed.co.uk or CV Library, but that means nothing if you don’t get a good response and end up with limited or no relevant candidates. This is where our expertise & established relationships with the various advertising platforms comes in.
So, what are the highest costs in recruitment?
Without doubt – getting it wrong! The estimated costs of getting it wrong and making a bad hire on a salary of around £25K is in excess of £45K. So fully investing in the process in terms of both money and your time is certainly key & will pay dividends!
One of the best ways to reduce recruitment costs is simply to focus on retention of the employees you already have. It’s obvious, if you don’t have to replace you don’t have to occur any costs, only for new additional hires coming into the business.
Contrary to popular belief, even traditional agency recruitment pays for itself, because using an agency saves time and effort in the process and if you have access to and hire a superior level candidate than you would have done if you recruited yourself, the agency fee will be recovered many times over by the higher calibre of the candidate recruited & what they bring to the table.
So, let’s briefly summarise the best ways to cut recruitment costs:
- Get a recruitment management system in place that improves efficiency, like our very own SDW cloud based candidate management system, which for a limited time we are offering it at only £40 per month and for the same price for life. No contracts and you can cancel at any time.
- Choose the right advertising channels at the start & not the cheapest.
- Spend more up front and less in the long-term.
- Be realistic with your budget
- Use fixed priced services like SDW eRecruit to get better value for money for your advertising budget and to be able to tap into their expertise.
- Spend time writing a compelling & fully optimised advert that the job seekers that you want to hire, firstly see. And secondly, they are attracted to the opportunity and click the apply button.
- Apply due diligence and hire the right people for your business and team / cultural fit.
- Focus on retention of both existing staff & that of new hires.
I hope my latest blog has been of interest and if either myself or any member of our friendly team can be of assistance with anything recruitment related to the shipping, freight forwarding or logistics industry, please do not hesitate to get in touch. Plus, if you are currently recruiting, for a limited time we are offering our full SDW eRecruit advertising solution for just £499 for new customers, call or email us now on 023 8033 6633 / firstname.lastname@example.org
All the best,
Steve Wyeth – Director & Founder of SDW