Oct 11th 2022
5 Ways to Decrease Hiring Costs With Data-Driven Recruitment
Businesses need employees to work. They need them to handle the day-to-day tasks, drive the production process, handle marketing and sales, and pretty much keep the business running. All of this costs money, and we aren’t just discussing salaries and benefits packages. We are talking about hiring costs – the money an organisation spends to find, recruit, and onboard a new employee.
On average, every new job attracts 250 resumes. If the job is for a highly-rated company and comes with good benefits, it can attract thousands of applicants. This means that you’d have to go through the applications, narrow down your choice to a few, conduct interviews, make your choice, and only then start the onboarding process.
Recruiting a new person costs a lot of money. We are talking about turnover costs, agency costs, onboarding expenses, job board fees, and training. According to the SHMR, the average cost to hire an employee is £4,200. But when you include additional soft costs this can end up costing 3 to 4 times the salary of the new member of your team, which adds up to a lot over the years!
Here comes the biggest question for recruiters – is there a way to decrease the hiring costs and still hire the best talent out there?
The answer lies in data-driven recruitment. In this article, you’ll learn how to base your recruitment on data to decrease expenses.
What is data-driven recruitment?
Data-driven recruiting is using facts and numbers to make your hiring decision. This can have a great effect on your company’s hiring success. Smart recruiting teams collect, analyse and use data to attract and detect the best talent, as well as reduce their spending.
Here is how data-driven recruiting helps recruiters:
- Boost your quality of hire. Based on data, you can create better job descriptions and packages to attract the right people, as well as learn where to find them.
- Smarter budget allocation. Data can tell you where and how to allocate your budget to maximise success and minimise costs.
- Accurate forecasts for hiring costs. If you take a look at the numbers and calculate them, this will help you forecast how much you need to allocate to hiring in the months and years that follow.
Ways to use data to reduce hiring costs for your company
Now that you know how useful this can be, let’s get to the action. We present you with the top ways to use data to reduce expenses for your organisation.
1. Conduct pre-employment tests to find the most suitable candidate
Screening resumes and cover letters don’t make for smart recruiting today. Companies that base their decisions solely on resumes and application documents don’t always find honest, good candidates for the open roles.
While screening the CV or resume is a great start and can help you eliminate candidates that are not qualified for the job, you need to keep in mind that not all resumes are honest. Candidates often exaggerate, and some are too humble. This means that you can easily make a mistake and hire the wrong person. For that reason, you need the smart pre-employment tests by TestGorilla.
Use the resume to get to the point where you have a small pool of candidates whose qualifications look worthy of your company’s attention. Then, conduct tests to find the ones that deserve the open position. People that are interested in working for you, really interested, will be more than glad to do a small test to show their expertise.
The best way to save money is to strengthen your employee retention.
Thanks to TestGorilla, you can customise ready tests with your questions, send them in bulk, as well as get an analysis of the results in no time. This tool will save you time, maximise your hiring success, and save you a fortune since you’ll pick the right candidate for the job.
Just imagine what you’ll save on training if you hire a person that has the skills to do the job well. The onboarding process will be simpler and cheaper, and you won’t have to spend even more money on looking for another candidate.
It costs 6 to 9 times the salary of a current employee to replace them, and it takes months to train and onboard the new person. The best way to keep good hires onboard is to hire the right people for the job in the first place. For this, you need tests.
2. Use a hiring platform to connect with the best talent
One of the reasons why hiring costs so much is that most recruiters don’t know where the best candidates will be. They are throwing money on ads on all the pages and platforms they can find, as well as wasting days of their time to try and reach out to potential hires directly.
The next best trick is to use a hiring platform to connect with the most qualified job seekers on the market. Instead of spending a fortune on ads or looking for candidates manually, you can use Tempo to match with the best person for the open position at your company.
Tempo is a hiring platform that connects companies with a large community of great job seekers in different industries. Thanks to AI, the site can almost instantly match recruiters and people based on skills, preferences, and experience.
This will cut down the time spent to find applicants, as well as maximise your chances of finding the right people for the job. If you want to look for candidates in the right places, a hiring platform is a very smart move today.
3. Automate the recruitment process
The recruitment process costs a lot of money. Some metrics that contribute to these expenses include source of hire, cost per hire, time to hire, as well as factors like acceptance rates and candidate experience scores.
As a business that is looking to decrease hiring costs, you need to pay attention to all these types of data. The idea is to decide what you can save money on – and tweak your recruitment process to make it happen.
For starters, you should learn about cost per hire. This will tell you how much you need to allocate to recruitment, but also what is adding to your hiring expenses. Are you spending a lot on ads? Is manual work costing you a lot i.e. paying people to read resumes, adding permissions for every member, and more?
The solution to most of these is automating the recruitment process with Recruitee. If you do this, you can minimise a lot of the expenses, optimize the onboarding process, as well as reduce most of the manual work that comes with recruitment.
4. Ensure the employee’s positive experience with your brand
Hiring costs get bigger and bigger when you have low job offer acceptance rates or a high turnover of new hires. This means that your efforts were in vain and people decided not to accept your job offer. Or, they started working with you and didn’t like it.
Either way, when this happens, companies need to dedicate tons of money to finding a new employee when they’ve already spent a lot on finding the previous one. Or, they are stuck with a few candidates that are not a great fit for the position, and they have to choose – hire a less qualified employee or invest more in finding someone else.
To avoid this from happening to your business, consider the following fixes:
- Make your job offer more competitive. Give the employee an offer they won’t want to miss out on. Create a good rewards package, give them an eloquent salary, and offer them opportunities for growth. Use the information from your current employees to decide on what to include in the package.
- Promote communication from the start. As soon as possible, make your candidate comfortable with sharing their motivations and concerns. Keep an open door to help them onboard easily.
- Write a detailed, accurate job description. People should know what they’ll do if they work for you from the very beginning. Be very transparent, starting with the job description. Make sure that they know their duties and requirements.
5. Improve your employee referral program
Employee referrals make for one of the best and easiest ways to find good talent. The employees that work for you have their own network of people with similar interests, people they studied with, worked with, etc.
Not only can they recommend someone great, but they’ll also spread the word about your business and make it more likely that the candidate will want the job.
The information you have inside your company is very strong. That being said, have a smart employee referral program that empowers your team to become your brand ambassadors.
Here are some great examples of employee referral programs.
Great employees aren’t that hard to find if you know where to look and how to attract them. This doesn’t even have to cost you a fortune – not if you hire the right people and eliminate the need to look for new team members after a few months. Hopefully, this article helped you find some ways to decrease hiring costs and maximise hiring success!