Recruiting Costs: How Much Does It Cost Your Business?
It’s no secret that recruiting can be a time-consuming and costly endeavor – but just how much does it cost your business? The answer may surprise you.
The cost of recruiting is often one of the biggest line items in a company’s budget. The Society for Human Resource Management (SHRM) reports that the average cost-per-hire in the US is $4,129.
This number can vary depending on several factors, such as the size of the company, the industry, the location, and the type of position being filled. But one thing is certain – recruiting is expensive, and it’s only getting more so.
With the war for top talent heating up, many companies are turning to recruitment outsourcing as a way to save time and money. Recruitment process outsourcing (RPO) is a type of business process outsourcing (BPO) where an external provider manages all or part of a company’s recruitment process.
While the cost of recruiting may seem like a necessary evil, it’s important to keep in mind that a well-run recruitment process can save your company money in the long run.
An effective recruitment strategy will help you attract the best talent, reduce turnover, and improve employee morale. In other words, a little bit of money spent on recruiting can go a long way!
There are many ways to reduce the cost of recruiting, such as outsourcing to a recruitment agency or using an online recruitment platform.
How much does recruiting cost your business?
Recruiting costs can vary greatly depending on the size and complexity of your organization, the industry you operate in, and the roles you are hiring for. Direct costs of recruiting such as advertising, employee referrals, and job board fees can add up quickly. Indirect costs, such as lost productivity due to time spent interviewing and training new hires, can also have a significant impact on your bottom line.
The cost of a bad hire, including the cost of replacing that employee and any associated damages, can also be substantial. To effectively manage the cost of recruiting, it is important to establish a budget, track your expenses, and continually evaluate and refine your recruitment processes to ensure you are getting the best results for your investment.
Ultimately, the cost of recruiting is an investment in the future of your organization and should be approached with a long-term perspective. By taking steps to minimize the cost of recruiting while maximizing the quality of the hires you make, you can ensure that you are investing in a strong, productive workforce that will drive your business forward.
How to calculate the cost of recruiting
Calculating the cost of recruiting involves taking into account several expenses, including:
Job advertising costs – costs associated with posting job openings on various job boards and other recruitment websites
Recruitment agency fees – costs associated with using a recruiter or headhunting agency
Pre-employment screening costs – expenses incurred in the background check, drug tests, and other screening methods.
Interview expenses – the cost of flights, meals, accommodations, and other expenses incurred by interviewers.
Internal time and resource costs – the cost of employee time spent on interviewing and training candidates.
Sign-on bonuses and other incentives – costs associated with attracting top talent to the company.
To calculate the cost of recruiting, total up these expenses and divide by the number of hires made. This gives you the average cost of recruiting for each hire.
How can you reduce your recruiting costs?
Reducing recruiting costs involves evaluating and optimizing various aspects of your recruitment process, such as:
Utilizing cost-effective sourcing methods such as employee referrals, social media, and online job boards, instead of relying solely on recruitment agencies
Streamlining the interview process to reduce time spent on non-essential tasks.
Investing in applicant tracking systems (ATS) to automate administrative tasks and improve efficiency.
Offering flexible work arrangements and employee benefits that reduce turnover and minimize the need for frequent recruiting.
Building a strong company brand and employer reputation to attract top talent.
Outsourcing your recruitment segment to an RPO, Outsourcing your recruitment process to a third-party Recruitment Process Outsourcing (RPO) provider like Glocal RPO can help reduce your recruitment costs in several ways.
By implementing these strategies, you can reduce the cost of recruiting while still attracting the best talent for your organization.
Why Glocal RPO?
At Glocal RPO, we have dedicated teams of experienced recruiters, which can help you save time and money by streamlining the recruitment process. We also have access to a large pool of candidates, which means you won’t have to spend time and money on advertising your open positions.
We specialize in managing the recruitment process, from sourcing and screening candidates to on boarding and retention. Our outsourcing model allows companies to Save time and resources, Improve the quality of hire, Increase efficiency, Enhance employer brand, and Mitigate risk.
Book a FREE TRIAL today: www.glocalrpo.com