Behind every successful business is a talented team.
This is true of everything from mom-and-pop shops, to highly dynamic start-ups, all the way to large corporations. Consequently, there is one strategy that is consistent across all industries and types of business: hiring the right people.
But finding new employees who will thrive in your environment and make significant contributions isn’t the easiest task. There are many talented candidates in a large labour pool; selecting the one that meets your requirements and is the right fit for your organization is no simple feat. And then there is the cost of recruiting new employees, an aspect of the hiring process that often goes overlooked.
Talent acquisition involves much more than advertising a job and providing a salary. Training, benefits, and other ancillary costs can pile up very quickly. And, if you select improperly and the successful candidate turns out to be a dud, you have to go through the process all over. The U.S. Department of Labor currently estimates that the average cost of a poor hiring decision equates to roughly 30% of that individual’s salary. That’s why it’s so important that it is done right the first time.
Common Costs of Recruiting New Employees
According to GetHired.com, the average cost associated with a new employee (taking into account both the recruiting and hiring process) is almost $19,000. This is because finding the right talent involves much more than pouring over resumes and conducting interviews.
You also need to consider:
- The resources required in identifying the need, and developing a thorough job profile for the position.
- Time and money expended advertising the job on job boards.
- The time investment required to examine resumes and pre-screen candidates.
- Setting up interviews with potential candidates.
- Conducting the interviews themselves, which often requires multiple interviews with a few potential candidates.
And this is all before you include the cost of paying the employee salary, which in itself is not a fixed cost when you take into account benefits and other packages. In fact, with benefits included, the total cost can be almost 1.5 times the given salary.
Improving Your Hiring ROI
All things considered, the total cost of recruiting new employees is higher than many anticipate. Because it can be such a significant investment, you want to make sure that you hire the right talent so that you gain a demonstrable return on this investment.
Here are some tips on how to achieve this:
- Develop a thorough, well-defined job description. This helps you not only attract the right candidates, but also outlines what your organization needs from a new hire – a good internal reference.
- Advertise the job opening on industry-specific platforms for more precise targeting.
- Consider using interviewing techniques or applications processes that more accurately reflect your company culture; focus on hiring for fit, as well as any necessary skill sets.
- Hire a trusted employee recruitment service that can help source, pre-screen and deliver the right candidates to you.
Reduce your risk of a bad hire and follow best practices for recruiting, negotiating and onboarding. Our consultants are always open to discussing how to improve and streamline your hiring and attract the best talent. Contact us »
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