5 Effective Ways to Reduce Hiring Cost
Updated: Feb 9
Relying on the traditional hiring process to fill a single position in a corporation has proven to be a competitive and resource-consuming journey for Human Resource Departments. Corporations spend $4,129 per hire, according to the Society for Human Resource Management. What are some ways Human Resource Managers can reduce cost-per-hire?
Simplify the hiring process
Many large enterprises are well-known for their complicated hiring process through the traditional hiring funnel. From job posting to resume selection, an interview conducted by Human Resources, another interview with the operations department, and then back to Human Resources for background check and logistics, the hiring process can be exhausting. If each step utilizes similar resources, skipping one step in the hiring funnel can reduce at least 20% of the hiring cost. Some software giants have already combined the two interviews.
Use new recruiting software / hiring technologies
Organizations are shifting some of their hiring processes to Artificial Intelligence (AI). This trend is one way organizations are reducing costs in various departments, including Human Resources. New hiring software has reinvented the hiring funnel and declared it is able to reduce 75% of cost-per-hire by eliminating excessive hiring processes such as interviews and resume screening.
Do a talent search internally
In every company, there are always employees in each department with undiscovered talents. Employees know and have already adapted to the organization’s culture and have skill sets and experiences that are ready for a promotion to suit your new opening. Promoting internally does not only save you the cost of hiring and training, it also engages the employees by increasing the morale of the department and the company, hence employee loyalty and retention rate. So, always hire internally first.
Reduce the need to recruit
In the past, most companies devoted their attention to productivity and efficiency, but increasingly, companies are also focused on workplace culture. Some have even renamed the Human Resources Department “People and Culture Department.” A workplace where employees feel enthused and inspired can retain talent. A study found that when employees are engaged by their job, they are 59% less likely to search for a job in 12 months. No need for recruitment means no hiring cost. You can then be more focused on training and building an engaging workplace culture.
Utilise networking and connections
As a Human Resources professional, you may have a lot of connections; however, you might not know a bunch of highly skilled professionals in one specific area who are ready to be hired. Utilise each departments’ network and connections. When there is a new opening in a department, ask the department leader to give you some referrals first. Not only does this save you money on cost-per-hire, it also builds a good relationship with each team leader, and new recruits are more likely to be highly engaged, resulting in higher retention rates.