Hiring is expensive. It’s estimated that the average cost per hire is $6,110 when personnel costs are taken into consideration. Hire the wrong person for a position, and the costs skyrocket. Internal disruptions, lost customers and risk for the brand multiply costs by tenfold or more. Some HR experts peg the costs of a bad hire at nearly a quarter of a million dollars.
If you’re considering expanding your operation, keeping hiring costs low is key. To reduce your recruiting expenses without hurting the quality of your candidates, heed the following four pieces of advice.
1. Clarify your job ads.
Leading questions like, “Do you want a job with unlimited income potential?” can make a job advertisement exciting. They practically guarantee that you’ll receive a slew of applicants — and that most of them will be woefully unqualified.
Applicant fit is more important than volume. To improve it, HubSpot suggests starting with a company summary. Before applicants ever start to think about duties and salary, be sure they know what sort of work your company does.
What else should your job ads contain? Using concise, realistic terms, describe:
Your company’s culture.
The role’s core duties.
Compensation (at least a range).
Required or desired education and related hard and soft skills.
Whether the job is remote or on-site.
How to apply.
You may not find a candidate who ticks every box, but hold out until you spot a few candidates who believe in your company and can handle the core responsibilities. Finding those individuals faster starts with a better job description.
2. Get through the first round faster.
Hoping to find that perfect candidate, many recruiters spend far too much time on early stage applicants. Make more time for candidates who may actually sign on by streamlining those initial contacts.
An applicant tracking system like BambooHR or Greenhouse can help you weed through low-quality candidates without forgetting about the ones who show promise. Video-conferencing solutions like Vast Conference can expand your pool to remote applicants. Reserve in-person interviews for people at the end of your pipeline.
3. Ask your team for help.
Employee referrals remain a top converting source of hires, but you shouldn’t abandon job boards and professional social media sites altogether. Great referral programs have two components: clear processes and ample rewards. Make sure employees know which roles you’re actively hiring for. If they have someone in mind, what should they do next? Copy both the prospective candidate and the recruiter on an intro email? Connect them directly to you, the boss?
Second, institute a referral bonus. Tiered structures work well to keep candidates in the pipeline. Perhaps an initial referral earns $50 — but if the referred candidate is actually hired and retained for three months, the referrer earns $500.
4. Retain your existing employees.
Although strong sourcing processes and job descriptions are key, they’re only part of the picture. Reduce the number of roles you need to hire for in the first place by giving your current team reasons to stick around. LinkedIn data suggests that passive candidates make up 70 percent of the global workforce. If you aren’t taking care of your team, seven in 10 may be willing to jump ship if a better offer comes along.
Ask your teammates what you can do to create their ideal work environment. If you’re concerned about office politics preventing them from giving an honest answer, put a locked box out for suggestions. Even if it costs a few thousand dollars per year to provide a new benefit, it’s cheaper than backfilling a role because its stellar prior occupant didn’t feel appreciated.
When asked about his hiring mistakes, Zappos CEO Tony Hsieh estimated the online shoe retailer had sunk well over $100 million into hiring and retaining the wrong employees. Don’t let your startup start down that path. Start small. Rewrite job descriptions, consider remote candidates, ask for referrals and be a better boss to your existing team. The return on your investment will be huge.