There is a lot of uncertainty about the labor market shortage, economy and state of the world in 2023. For HR, this puts an increased focus on attracting and retaining top talent to keep your business secure for whatever’s to come.
If you need another reason to reduce turnover, consider this: Recruitment may cost more than you think, with employers spending at least $889 filling just one position, according to the new Bluecrew research.
The hidden cost of recruitment
Recruiting can be a costly expense between job postings, background checks, onboarding and more. But it can be challenging for an employer to conceptualize just how much it can cost your company in money, time and resources.
According to the new research, it can cost more than $6,700 to replace a worker who makes $15 per hour. Plus, turnover for a 50-person workforce can cost as much as $168,000. To put those numbers into perspective, turnover for hourly workers is just under 50%.
Many companies are quick to hire amidst a competitive talent pool and no shortage of open positions. However, hiring the wrong candidate can cost companies up to 30% of the worker’s annual wage.
The cost of a bad hire includes factors such as:
- Strain on other employees
- Increased errors
- Low team morale, and
- Lower productivity.
Even when hiring the right candidate, it can take six months after hiring to break even on recruiting costs.
How to keep recruitment cost-effective
Recruiting is a necessary part of any business, but there are some things you can do to make your recruiting work for you while keeping costs low. Here are a few ways that you can make sure that you’re getting the most bang for your buck when it comes to hiring.
Continuously build a talent pool. Building out your talent pool with high-quality candidates can save you money and reduce the time and effort spent on seeking out candidates. Building it out continuously can help in times of mass hiring to keep costs low.
Explore new avenues to attract talent. TikTok and Instagram aren’t just for scrolling – they can be for hiring, too. Utilizing social media and other unique avenues can help recruit unique candidates for a much lower cost than a traditional job ad.
Use automation and tracking software. Although the upfront cost can seem steep, automation software for hiring and recruiting, as well as onboarding software, can save dividends in time and effort, freeing recruiters to focus on what matters.
Encourage employee referrals. Employees can be a great recruitment tool. Encouraging employee referrals for job openings can not only cut costs but can also create an engaged workforce and cut down on time-to-hire.
Focus on retention for current employees. In today’s climate, retention is the name of the game. Focusing on keeping top talent happy and engaged can pay off by reducing the rate you need to recruit for open positions and all the costs associated with new hires such as onboarding and training.