Recruiting new talent has been a top workforce management priority among Health and Human Services (HHS) executives for the past few years. With today’s tight labor market and ongoing talent shortages, there’s little chance that this trend will change any time soon. While it’s important to prioritize and invest in hiring top talent, your recruiting processes may be chipping away at your bottom line. By understanding the costs of your recruiting efforts, you can begin to identify financial inefficiencies and create a more streamlined process that benefits your organization and improves the candidate experience.
Financial Recruiting Costs Are Only Part of the Story
When thinking about the cost of recruiting management, we often think about things in terms of cost per hire. In other words, the total cost of all recruiting efforts divided by the number of hires made in a given year. These include a variety of financial costs, such as:
- Job board fees
- Costs for maintaining and updating your career site
- External recruiter fees
- Internal recruiter salary, travel expenses, etc.
- Organizational branding at job fairs
- Fees for background checks and other pre-hire assessments
Time Is Money
While these financial costs are important to look at and consider when looking at your recruiting management strategy, they don’t tell the whole story. Other metrics can point to areas in need of improvement as well. For example, time to fill and time to hire. Time to fill may be considered the amount of time from initially opening a position to having an individual fill that role, while time to hire might be measured from the initial interview with the person that eventually gets hired to the offer date.
In both cases, longer periods of time are associated with higher costs – and not just financial costs. The longer your organization waits before making an offer, the more likely that candidate is to find and accept a position elsewhere. In fact, research from Gartner shows that the average time to hire in 2018 (across all industries) was 33 days, marking an 84% increase from 2010. This increase in time has resulted in a 16% reduction in candidates accepting offers. And a declined offer can mean an even longer time to fill for a given position.
Another “hidden” cost of the recruiting process that is often overlooked is daily lost revenue. For positions that are revenue-generating for your organization, every day that the position remains unfilled amounts to additional lost revenue. However, even when organizations are aware of this missed opportunity, few take the time to calculate just how much revenue is being lost in real dollar amounts. Viewing your vacancies holistically and taking these costs into account can help you focus on high-impact positions first.
Assessing Your Recruiting Management Strategy
It’s important to take the time to vet candidates and find the right person for the job, as bad hires are even more costly for your organization’s bottom line. But it makes sense to take a look at your current recruiting processes to identify inefficiencies or areas that are creating unnecessary costs for your organization. Having a well-structured and well-organized workforce management system can help you see these hidden costs as real numbers that can help you prioritize and streamline your recruiting management strategy.