Amongst the many functions of HR departments is conducting efficient hiring processes, and one of the factors these professionals need to keep in mind is the cost of this activity. A badly conducted hiring process, without a clear strategy, can be very costly to an organization – in ways that go beyond the financial impact. Having to start the process over (if the wrong individuals were hired) can increase costs associated to training, demand more time of recruiters and cause a decrease in productivity.
No company wishes to have to deal with these issues, so focusing on the quality of the process is paramount in order to decrease unfortunate outcomes and associated costs. In this article, we will go over best practices to ensure your company has successful hiring processes.
Identifying costs associated with hiring processes
The first step in optimizing your hiring process and potentially reducing costs is to know how your current process works and how much it actually costs. A good starting point is to analyze the following points:
- Through which channels (Linkedin, institutional website, head hunters, and so on) do you reach candidates? How efficient is each channel?
- How long does it take, on average, for a role to be filled?
- How good were the recent hires? Were there any issues or unexpected turnover?
- Which tools do recruiters currently use (softwares, spreadsheets, and so on)? Are they satisfied with them?
According to a survey conducted by the Society of Human Resource Management (SHRM), the average cost of selecting an individual in a hiring process in the U.S. is four thousand dollars. Many factors can impact each organization’s average. For example, the more people you need to hire, the less each hire will cost, as fixed costs of the process are diluted.
However, as larger companies have to deal with an increased number of candidates, they face a different challenge: analyzing hundreds, sometimes thousands of CVs. In a research conducted by Rocketmat with our own clients, we found that enterprises can fail to analyze up to 85% of candidates just in the initial steps of the process, such as CV screening. This can be corrected with the use of Artificial Intelligence, that allows us to screen thousands of CVs in seconds, ensuring a more efficient and fair process.
As previously mentioned, there are other hidden costs associated with hiring processes, particularly when they fail to hire the right candidate. A higher turnover rate, lower productivity, and even a declining public view of the company are some of the negative outcomes associated with failed hiring processes.
10 tips to reduce costs associated with hiring processes
1. Be very clear about the expectations and requirements of each role
During the entire process, HR professionals must be very transparent about the role, offering as much information as possible. This will help “weed out” candidates that are inadequate.
Some of the important information is:
- What are the company’s values;
- Which activities they are expected to perform on the job;
- What are the benefits provided, as well as the salary they can expect to receive;
- How flexible the hours are, what days are they expected to work and whether this is a remote, hybrid or office position.
2. Go beyond the CV
While technical skills (also know as hard skills) and previous work experience can tell you a lot about how well suited a candidate is for a role, soft skills and personality traits are just as important when evaluating a candidate.
3. Align expectations
Make sure to know what are the long term goals of the candidate, and if they align with the company’s plans. Nothing is worse than investing a lot of time, resources and effort into hiring a candidate only to find out they plan to leave in 6 months.
4. Check for Culture Fit
Even if a candidate has the right hard and soft skills for the role, if they are not aligned with the values and organizational culture of the company, they are unlikely to stay long term. This is why culture fit is so important, and should be looked at during the hiring process.
5. Give candidates feedback
One of the biggest mistakes recruiters make in hiring processes is failing to give candidates feedback when they aren’t selected. It is extremely frustrating for the candidate to invest their time and effort into a process only to be rejected and not even know why they were rejected. This can damage the company’s image and prevent future candidates from even applying.
6. Know what each role requires
Each role is different and may require different steps in hiring processes. For entry-level roles, for example, testing specific skills is unlikely to be required. This directly impacts costs by eliminating unnecessary steps in the process, streamlining it.
7. Invest in Employer Branding
According to Linkedin, companies that invest in employer branding can reduce their hiring costs in 43%. These companies also grow faster than those who don’t invest in employer branding because they attract talent more efficiently.
8. Choose the right channels
Identify the channels that work best for your company and focus on them. You don’t have advertise job openings everywhere, just in the right places.
9. Create an internal recruiting policy
Sometimes the perfect candidate is already inside your company. Internal recruiting is significantly cheaper than traditional methods, as you already have good data on hard and soft skills, as well as culture fit.
10. Use technology in your favor
By automating and optimizing the hiring process with software and Artificial Intelligence, you can save time and resources. Rocketmat creates custom made AI solutions for your hiring processes, as well as provides a ranking of the best candidates directly in your recruiting software. To learn more, contact us.