Smart Hiring on a Budget

7 Practical Strategies for Cost-Effective Recruitment

Cost-effective recruiting isn't just about saving money; it's about addressing the persistent issues of employee turnover and low retention rates.

Amidst current global economic challenges, most businesses are keen on cutting operational costs, especially in talent acquisition. As a result, these organizations find themselves overloaded with workers that are either not fit for their positions or wanting to resign for not finding satisfaction in the job.

Simply reducing budgets isn't the complete solution. And here's a surprising fact: inefficient hiring can cost your company up to 30% of a new employee's first-year earnings. That's simply a hefty price to pay. Real success then lies in reimagining how we hire.

In this article, we'll explore practical strategies for cost-effective recruitment, showing how this approach not only helps your company financially but also brings in top-quality talents.  

Here are 9 pragmatic steps to help you hire top-rated talents on a friendly-budget:

Publish Job Ads Where and When it’s Worth It

Time and position matters for cost-effective recruitment. You must publish your ads in the places that can yield the best results, and also do so at the right moment. 

To do that effectively, you may need to invest in data analytic services that would help sort out the appropriate channels and also give you an idea of the best times for advertising a role. According to Harver, job openings receive more applications on Mondays than other weekdays. 

Therefore, start out by investing in data services and tools that can give you an accurate idea of where your job openings are likely to appear before candidates that fit the description of the roles. 

Set-up an Internal Mobility Program to Augment Skills Shortage

Looking internally to hire from your current workforce is one of the most effective cost-cutting measures to consider. This however can only be achieved if your company has an internal mobility program that allows employees to move to new internal positions within the organization. 

If your company currently doesn’t have such a program in place, you can follow the subsequent steps to implement the initiative. First, embrace the culture of encouraging workers to switch from one role to another. Then audit the competencies of the workforce to identify skills gaps that you may need to hire for. When that is done, you may need to use various means to arouse in your staff an eagerness to want to learn to take up new roles. 

It is also recommended to prepare a simple doc that maps out the internal recruitment process with your firm. 

Encourage Direct Referrals from Employee

It is easier to find culture-fit workers when they are directly referred by your employers. Usually before an employee refers to his or her peer, there have usually been some moments of interaction amongst them where they discuss what working in your company feels like. Also, your employees’ cognizance with the norms and policies of your organization helps them to know beforehand if their acquaintances can easily blend in with your company’s culture, making them long-term fits. Referred hires are usually faster at attaining peak productivity than outsourced candidates. 

Therefore, consider building or fine-tuning your employee referral process. An easy way to do that is to offer incentives like retail gift cards or cash rewards. 

Schedule Interviews Online

Remote interviews have been found to lead to shorter time to hire, circumvent risks of unconscious hiring biases, feasible scheduling, and ultimate decrease in hiring costs. According to Harver, businesses are 2.7 times more likely to enhance their cost per hire by adopting online interviews than those who do not use them. Therefore, instead of phone calls which may attract more expenses, you can implement a one-way video interview to examine your candidate, thereby streamlining your interviewing processes and shrinking the number of hours usually associated with candidate screening. 

Virtual interviews are also much less costly for candidates to participate in than physical screening. 

Build a Diverse Talent Pool to Reduce Time-to-Hire

Building a network of readily accessible talent will make finding suitable candidates quick, and also reduce the associated cost while also serving as a safety net in the event of a sudden mass departure of staff. 

This way, you are guaranteed to never find yourself a cross-road stuck with no immediate solution when a need to recruit fresh hands arises. How to do that? There will probably be candidates who missed out on getting hired during your previous recruitment circles, and they are yet to find their desired job. Your recruitment team can re-initiate contact with such persons and engage them into working for your firm. This will help to decrease your total cost per hire while easing the recruitment process. 

Alternatively, your team can decide to leverage the expertise and experience of recruitment agencies in the industry for efficient candidate sourcing, screening, and selection, ultimately saving time and resources.

These agencies typically have extensive networks and access to a diverse talent pool that enable them to find suitable candidates in less time. 

Leverage Social Media and Other Digital Channels A whopping 70% of hiring managers say they successfully utilized social media to recruit staff, and 71% said social recruiting takes less time. That of course, also means less resources, which invariably means lesser budget required. 

In the internet age, it has become relatively easier to spread the word about the current recruitment opportunities in your company if you can set up a website and a few social media accounts on strategic platforms like LinkedIn, Twitter and Instagram.

Remember, social media is completely free to use. Plus, you get the opportunity to boost your company’s reputation by gradually building out your employer brand.

Prioritize Quality over Quantity Your candidate selection process is the most important guideline as you implement the above cost-effective recruitment tips. 

As you may find out, your team’s ability to identify quality candidates will be the most crucial factor in cutting down the cost of your organization’s talent acquisition expenditures. Bad hires result in low retention rates which increases turnover, and that ultimately pushes overall costs upward.  According to Gallup, the cost of replacing an employee can be as high as 1.5 to 2 times their annual salary. So, how can you ensure you are always hiring the right fits? Re-evaluate your candidate assessment criteria and inquire about current best practices that your competitors are using to stay ahead. 

In Summary

A cost-effective recruiting strategy isn't just about spending the least amount of money possible. Instead, it's about making strategic choices to maximize the value of your investment. When optimizing your recruitment strategy, it's essential to be intelligent with your budget. Explore avenues to make the most of your resources, ensuring you fill roles with high-quality candidates without depleting your entire budget.