by Linda Finkle
Many managers and business owners do not realize that an unorganised recruitment and hiring process can drain your company’s time, effort, and money.
Often times the hiring process takes a backseat in the organisational business process planning, because only few people realize that keeping track of the recruitment process is just as important as keeping track of the profits and expenses.
I say again, tracking time and resources spent on recruitment are important. Why? Well put it this way, every step of the recruitment process not strategically planned equals loss of potential applicants, overspending of money for ineffective recruitment campaigns, and the potential being understaffed or overstaffed, which leads to unnecessary payroll expenses.
Just imagine how much money you will be wasting on inefficient job advertisements!
And how about that recruiter you keep paying to find that right applicant, which, when hired, doesn’t even stay for a year?
The recruitment and hiring process becomes long, difficult, and expensive only if you do not have proper plans and metrics in place.
Before you embark on the recruitment process, make sure you will get the most out of every dollar you invest. In order to this, experts suggest HR managers to measure two key metrics: the cost per hire and the time to fill.
Here’s a closer look at the two:
Cost per hire
Simply put, this is the amount of money an organisation spends on each new hire all throughout the recruitment and hiring process. The term is not as simple as it looks, as you will undoubtedly find out, when you start tracking it.
By measuring the cost per hire, you will have an idea of what it will cost you to hire for a certain position.
Below are some of the hiring activities that drive the most expenses:
- Job posting expenses
- Advertising expenses
- Headhunter fees
- Admin cost
- Recruitment cost (internal)
- Relocation expenses
- Travel expenses
To be able to calculate this, sum up all the money spent on the entire recruitment process and then divide this to the number of employees hired for the year. With these numbers on hand, you will be able to keep adjusting the cost you spend until you find just the right budget for the recruitment and hiring process.
You can also use this to test which job advertising technique yields the most favorable results, by using only one method per hiring.
For example, you can use print ads on your first hire, and then record how much you have spent in total before you were able to hire. After that, choose another method, such as a headhunter or social media job ads, and then record how much you spent. The method that can get you a new employee in the most efficient way is undoubtedly the winner.
Time to fill
How long does it take the organisation to fill a vacant position? This is the time to fill. Remember that the very moment an employee leaves a position empty, the business chain is hampered, and money is lost. So every day that the recruitment process is delayed, the organisation losses valuable profit.
There are a number of hidden costs that go into time to fill the position such as:
- Management time to interview
- Overtime paid if necessary
- Consultant and/or temp hires to cover the work load
- Stress, frustration and discord from employees who have extra work
An efficient recruitment and hiring process must be able to fill in vacant positions the soonest possible time. By doing this, business operations are able to continue seamlessly.
If you don’t do this yet, I suggest you implement it now. Tracking these metrics will improve the efficiency of your company’s recruitment and hiring process, and it will save you money and make everyone’s job easier.