The Real Cost to Hire
Cost to hire is often one of the most important metrics measured and discussed within an organisation when looking at recruitment. Management want to know how much recruitment is costing them and recruiters are constantly under pressure to reduce cost to hire.
But what really is the cost to hire? Paid Adverts, Agency Fees, Recruiters Salary?
All of the above. And more.
What a lot of organisations fail to measure is the true cost to hire which not only includes the above but also the cost to the business for not having that hire in place. Let’s take the example of a Business Development Manager leaving. They hand in their notice, and your recruiter has 30 days to find your new Business Development Manager. It’s not realistic that that can happen, unless the perfect candidate is waiting around the corner, unemployed and ready to start – highly unlikely.
The more likely scenario is your recruiter reacts to the vacancy, goes to market, advertises, engages agencies, finds the perfect candidate, the candidate has to give notice, they start two months after the initial notice.
So what’s the cost?
The agency fee.
The loss to the business!
You’ve had 30 days without your Business Development Manager, which means 30 days without sales. Take into account, time for the new started to embed, learn the product and go to market you could be a few months without any new income. That’s the true Cost to Hire.
When looking at reducing Cost To Hire, there are a number of ways you can do this. Of course we all know the most efficient cost to hire are those who apply to you directly, no advertising costs, no agency fees etc. But the best way to reduce Cost To Hire is to move from a Re-Active to a Pro-Active recruitment model. Click here to read our white paper on Re-Active vs Proactive Recruitment.
Contact us for a detailed consultation to see how Recruitive can help you reduce your hiring costs.