Updated at 31/08/2022 - 05:25 pm
Planning and recruiting new employees is the building block of the hiring management process. As a hiring manager you need to outline the various costs associated with this task.
While the recruitment investment is the most important expense, there are a number of potential costs you need to consider when planning your recruitment costs correctly.
Recruitment investments #
The investment investment in recruitment is the cost that is often the top concern. Salary for the main recruit and salary for any additional employees who will be involved in the recruitment process, commissions or bonuses for referrals and advertising costs, job posting channels.
Enterprises may also have to invest in specialized software for screening, tracking and managing candidates; software related competency tests or background checks and costs for recruitment events or job fairs your company participates in.
Cost of time during the recruitment process #
It is possible that the business has allocated a certain amount of financial expenses as outlined above, but do not underestimate the time required for the recruitment process. For example, design time to ensure job descriptions highlight the skills and qualities you are looking for in your ideal candidate. If the description is not clearly defined, recruiters may encounter and review irrelevant resumes or interview candidates who don't really match the requirements of the business.
As a result, time also counts as a potential recruitment cost, the amount of time that skilled personnel invest in writing descriptions, identifying essentials that can lead to productivity, and lower profits.
Furthermore, during the hiring period, there is no productivity in the job position, or productivity is limited because the previous employee or another employee takes on the tasks. If the recruitment process takes longer than usual, this will increase the cost of time allocated for recruitment, and at the same time, the output of the business will also decrease.
Cost of candidate selection #
Depending on the number of resumes a business receives for a job position, it can take a considerable amount of time to filter through the different candidates, as well as their experience and skill levels.
Often, resumes are "slick" versions of a candidate's knowledge, skills, and experience, and can also cause potential candidates to be overshadowed. This is why more and more companies are choosing to perform prescreening measures such as real-life problem-solving tests, behavioral questionnaires and personality assessments before the interview stage to Save time and filter out the number of candidates.
Using screening software is an inherent financial cost, however, in small teams and organizations, the process of selecting candidates consumes a lot of staff time. Finally, when you come to a hiring decision, the salary negotiation phase can be prolonged, resulting in an increase in the recruitment staff salary allocated to the vacancy, and at the same time, productivity and output. lost in vacancies is also on the increase.
Training and support costs for new employees #
Cultural “fit” and inclusion in the workplace is a hidden cost issue that every business needs to be concerned about. There are unavoidable set-up costs, such as the arrangement of computers, software, desks, and training your new hires may need. additional skills training or certifications, which can cost your company financial as well as lost productivity in the process of training new employees.
If a new employee needs more time to integrate into the company's culture and way of doing things, this can also cause both the new employee and the person managing the newcomer's business to join the business. lost productivity.
If the recruitment phase of the business is planned and executed correctly, it will increase the likelihood of hiring the right people, ensuring that the transition and integration is easier for incoming and current employees, This means it will cost you less in the long run.
Cost of recruiting "wrong personnel" #
The worst part of the hiring process is hiring the wrong person who is completely unfit. That person will not be able to work effectively, causing them to leave, which not only means restarting the hiring process, but also leads to lower productivity of the remaining employees, morale employees are lower and cause work to be delayed. The hidden costs of hiring associated with this can add up to huge.
Many companies are looking to outsource recruitment services at recruitment agencies to avoid all the costs mentioned above. In general, recruitment agencies have an advantage over self-employed enterprises due to more invested industry networks, contacts, databases and human resource management. However, businesses also need to carefully consider choosing a reputable service provider with professional experience in the field of recruitment to avoid recruiting the wrong weak and inappropriate personnel.
Whether you choose to hire directly or through a recruitment service, be sure to factor in the cost of time, energy, and effort in addition to your recruitment investments.