As a business owner it’s important to always be evaluating your processes to find opportunities to refine your practices, especially when it comes to increasing efficiency and saving money. One of the largest business expenses that you can target is the recruiting process. From listing job openings to investing time and money in the interview process, there are a lot of hidden costs (not to mention inefficiencies) in the hiring process. For this reason, regularly reviewing your recruitment strategy, particularly when it comes to the associated expenses, is important.
Here are 5 ways to effectively manage your recruitment budget:
Break Down Your Recruitment Expenses
First, create a list of all the obvious expenses that are part of your recruitment spending—this could include paying to list job ads, finders fees for third-party recruiters, any bonuses employees receive for referring a new hire, or for sample work provided by applicants (if you plan to use it for client purposes later). Once you have those costs, it’s time to dig a little deeper into the hidden costs of hiring. What types of hidden costs might you be missing? Here are a few examples for starters:
- Time spent conducting interviews (both in person and over the phone)
- Hours spent reviewing applications
- Onboarding new employees (and preparing those materials or presentations)
With all these costs accounted for, you can now set a goal for when you’d like to be with your recruitment budget, as opposed to where you are now.
Brainstorm Ways to Reduce Your Expenses
Next, it’s time to brainstorm the ways you can reduce your recruiting expenses. Here are some popular strategies that you may be able to implement for your business:
- Use Free Resources When You Can: Free resources are often written off as low quality, however, that’s not always the case. Before you take time creating your own application templates, listing on paid sites, or putting together materials for interviews, look online first to see what’s available to you. You would be surprised to find that you can list job opportunities for free through certain colleges, find templates for virtually any documentation, and guides that can help you improve the efficiency of your hiring process.
- Streamline Interviews: As you likely know, interviews can drag on, especially with lower-level positions where candidates feel they need to ask tons of questions to look credible. Instead of allowing interviews to go on for an undetermined time, allot a maximum amount of time for each candidate. Keep an eye on the time while you’re in the interview and learn ways to strategically curtail the conversation (“Do you have any other questions for me?”, “Please feel free to email me if you think of any other questions.”, etc.)
- Only Involve a Few People: Of course it’s nice to get diverse perspectives on a candidate, but having too many people in interviews can bloat your costs unnecessarily. Instead of having groups go in separately, pick one representative per group, and establish a panel-style interview. This should make the best use of everyone’s time and help prevent the interviewee from becoming overwhelmed.
- Minimize Turnover Risk: One of the biggest hidden costs that can have a serious negative impact on your budget is turnover. Employee turnover is hopefully low, but even losing one employee shortly after hiring can be a huge blow as far as expenses go. While you can’t ever guarantee that a hire is going to remain with the company long term, you can implement certain measures that can reduce your risk of this particular financial loss. For one, you should strengthen your vetting process—it can be as simple as using a free identity check and having them complete an assessment.
- Refine Your Job Postings: One of the easiest ways you can cut down on your recruitment budget is by refining your job postings because it can eliminate a lot of time waste from the very beginning. Make sure that you have a highly detailed and honest job posting (include job duties and highlight deal-breakers and make sure to set realistic expectations). You also want to make sure you’re posting in the right places, where the types of candidates you want will be looking (consider age, specialty, etc.). You can also put screening questions within the first step of the application to help weed out those who are underqualified or a poor fit.
You’re Ready to Set a New Budget
Now that you’ve put in all this work, you’re ready to establish a revitalized recruiting budget that allows you to spend smarter. Hiring quality employees can make a huge impact on your business, so don’t cut corners for the sake of spending a few dollars. Instead, the takeaway is to find ways to cut out unnecessary expenses, use the resources at hand, and make your hiring the best it can be, which typically means money saved over time.