With everything it seems there are hidden costs. Whatever job or task you undertake it’s always worth factoring in an amount for any unforeseen expenditure. It can be the same when you are undergoing a recruitment campaign, whilst you’ll no doubt be aware of the marketing and campaign costs that are likely to hit you, is that it?
For many when taking the decision to recruit, being aware of the costs is very important. It’s easy to quickly dismiss that idea of using a recruitment agency because of the fees attached to them but, in truth it can end being cheaper than handling it all in-house. In fact cutting costs to the bones can ultimately lead to greater outlay particularly if by tightening your belt, it leads to the wrong decision being made.
That said, what are the hidden costs of recruiting?
Administration – If you keep the process in-house, someone, somewhere will need to be looking after process. This can be a long, arduous and labour intensive task. Think about what needs to be done – writing the job description, launching a job campaign to get fresh applicants, handling in-bound applications, phone screening applicants, responding to emails, conducting face-to-face interviews, conducting background checks, checking references, presenting the offer, and after all that – dealing with candidates that reject your offer. Try putting a cost onto that lot, or equating it into the number of hours it all takes. You might be surprised at the outcome.
Employing time – Many organisations now track the amount of time it takes for a campaign to reach its conclusion. This is because they realise that this time represents an overhead expense. Assuming that the accepted average time duration from advertising to appointment is 10 to 12 weeks, that’s a quarter of the year where that position is either showing no output or development during that time. Conversely if it’s essential that the position is covered, an interim employee may have been put in place. Another cost.
Management time – Managers have to take part in the recruitment process at some point, even if you have a designated HR department doing much of the ground work. There will time involved in putting the job specification together as well and assessing CVs and interviewing. Research shows that over 50% of job offers made are declined, so often it means that the process is repeated more than once. The cost of management time is one that remains whether the recruitment process is undertaken in-house or outsourced.
The overall costs of recruitment can be far reaching and over–bearing. It’s essential to try and get it right first time so things don’t end up getting out of control. Cutting back the way you recruit can impact greatly on the final result, which if not yielding the people will end up costing far more in the long run. The idea that using an agency to recruit creates unnecessary costs might also be a misnomer. As a rule of thumb whatever the base salary is for a position, by doubling it you will arrive at the recruitment cost for that role. What you need to do now is decide how to get to that point.