Effective Ways To Reduce Recruitment Costs

Last Updated on October 4, 2024

The average cost of a new hire is $4,129, and even that excludes the 20% charge some recruitment agencies take from the first annual salary. Indeed, the cost of hiring new staff is quite high, and for many businesses, it makes economic sense to try to reduce it. However, in taking measures to reduce costs, you don’t want to lose quality new hires. Therefore these points provide insight into what you can do to save your business’s coffers and still get the best.

Create referral schemes

Whether your business is financially constrained or not, employee referral schemes can help with your recruitment processes. It works on the concept of direct marketing and word-of-mouth recommendations. Your employees, in this case, become the mouthpiece of the company’s hiring process. They can recommend qualified people to take up available positions within the company. This certainly takes away the need for a recruitment agency and the associated fees that come with them. The advantage of employee referral schemes is that the existing staff become credible ambassadors for your organization.

Your staff automatically boosts the company’s reputation when they take on the responsibility of referring qualified people to join the establishment. According to labor experts, there is a psychological element to employee referral schemes. This is because referrals assume something good must be happening in your company to motivate staff to recommend them. As a business, you are also responsible for carefully assessing your employees’ referrals. This is done to ensure they are good fits for your company’s culture.

Rely on a recruitment agency that charges a flat fee

Many recruitment agencies make money by hiking traditional placement costs. This is usually 20% of every new hire’s salary in the first twelve months. Therefore, the more the salary, the higher the charges. Undoubtedly, that is a financial strain for companies with more than one new hire. On the other hand, other agencies charge a flat rate for new hires, which seems more reasonable.

In that case, you may want to focus on hiring agencies with charges that don’t burn a hole in your company’s purse. Aside from the two types of agencies discussed here, there is one more worth considering. Recruiting as a Service (RaaS) option charges for billable hours only. The absence of a standard fee or a cut of the new hire’s salary can save your business a lot of money in recruitment.  

Optimize your company career portal

According to 2019 labor reports, more companies optimized career portals on their websites. The objective was to have the target audience apply directly on company platforms. By so doing, prospective applicants have the opportunity to browse through pages to learn more about the company. Indeed, this cuts out the middleman and the cost involved. Another reason career portal optimization has become popular is that it allows businesses to control their internal content.

An internal team dedicated to company job postings and perusing submitted applications can play the role effectively. They will also act as gatekeepers to company information. Moreover, third-party job sites are already saddled with so much content and may fail to optimize your company’s job postings. With this in mind, it may be better to handle it yourself. Indeed, there is so much to benefit from optimizing your company’s career portal.