The Cost of Recruitment
Recruiting new employees can be costly and takes both time and energy, so it’s understandable if your heart sinks a little when the need to hire a new employee for your business arises yet again.
Employers are recognising the value of top talent, particularly those individuals that can drive their business forward and boost the bottom line. HR teams are facing a tricky task when it comes to ensuring a flow of continual talent into their business, and making sure they hire staff who are suited to the job and the culture of their organisation.
In a tight job market, where employers are competing with one another for the most skilled and experienced staff, this challenge becomes even more difficult.
In many cases, employers are going to recruitment companies to support their hiring strategies. Using a specialist recruitment agent to identify and attract talent, and negotiate terms, can relieve a huge amount of pressure and stress, and most of all, this approach is not as expensive as you may think.
This article discusses the benefits of partnering with a recruitment agency, the expense involved in recruiting in-house and how cost effective it actually is to engage a dedicated recruitment specialist, compared to spending valuable time and energy on the recruitment process within your own business.
What is the price tag of recruitment?
Every business needs to recruit employees at some stage, after all, staff are a business’s biggest asset. But in order to bring in the best talent to your business, it comes at a price.
Recruitment costs are the fees associated with finding talent, hiring, and onboarding new employees. This includes the cost of advertising the vacant position on Seek, Trade Me, LinkedIn for example, screening and interviewing candidates, conducting pre-employment testing and background checks and training new employees.
It is also important to consider the added expense of salaries associated with in-house recruitment/HR teams, internal commissions, or employee referral bonuses if applicable to your business, and the investment in software/ systems that are used to hire employees and manage the recruitment process from end-to-end.
It is also important to consider those non-monetary expenses that are hidden as well. Such as the time invested by hiring managers during the recruitment process. In business, time is valuable. While you may have already allocated a certain financial cost to recruitment, including the expenses noted above, it’s easy to underestimate the time it takes to hire a new recruit. Writing a job description and advert and posting it online also takes time out of your hiring managers busy day. Not to mention filtering through applicants may take considerable time. Then, when you finally reach the decision to hire someone, the negotiation stage can draw out the process longer. Although these elements of the recruitment process don’t come with a physical price tag, they still contribute to the cost of recruitment.
Benefits of Outsourcing to a Recruitment Agency
The recruitment process can be time-consuming and resource intensive. Outsourcing recruitment allows your internal HR team to focus on strategic initiatives and other core business functions. Specialist recruitment companies take care of candidate sourcing, screening, and initial interviews, saving you time and effort.
Partnering with a recruitment agency can help you fill vacant positions faster, reducing the time-to-hire timeframe and minimise any negative impact an unfilled position may cause or have on your operation. As often we don’t consider the cost of an ‘empty chair’, whereby recruiting managers often overlook the costs that pile up as vacant positions remain unfilled. According to a recent study by Career Builder, employers are losing between $14,000 and $30,000 for every job that remains unfilled for a period of three months or longer (role dependant). These costs are caused by lost productivity, stress and increased workloads for team members, a decrease in employee morale and engagement, poor customer interaction caused from slow response times and most of all, managers spending time doing tactical work rather than focusing on their higher-level strategic initiatives.
Recruitment agencies are dedicated to finding and attracting talent. They have extensive experience and expertise in sourcing, screening, and assessing candidates. By outsourcing recruitment, you can leverage their specialised knowledge and experience in the talent sourcing field.
You can also benefit from their access to a wider talent pool than what might be available to an individual organisation. They have established networks, connections, and a database full of candidates to tap into, enabling them to reach both passive candidates who may not be actively seeking new opportunities and those who are searching for their next career move. This expands your chances of finding top talent for your organisation in a quicker timeframe.
Outsourcing recruitment provides flexibility in managing fluctuating recruitment needs. Whether you require assistance with a single position or need to handle high-volumes of new staff, agencies can adjust their resources accordingly to ensure your variable recruitment needs are met. They can quickly ramp up or down their efforts based on your requirements, ensuring a scalable recruitment solution.
Recruitment agencies are well-versed in efficient hiring processes. They can quickly identify suitable candidates, screen them effectively, and move them through the selection process promptly using modern recruitment technology. From applicant tracking systems (ATS) to candidate sourcing and onboarding software, most recruitment companies use technology to streamline and automate the recruitment process.
Additionally, management of the candidate experience is particularly important for building and maintaining your employer brand. A specialist recruitment firm will manage each step of the candidate experience for you, and partner with you to ensure your business values, culture and ethos are upheld.
Employment laws and regulations change all the time and keeping on top of compliance requirements can sometimes be overwhelming, particularly for smaller organisations who do not have in-house HR expertise. Recruitment agencies ensure your hiring process remains compliant, fair, consistent and follows best practice recruiting methods.
Finally, another bonus is recruitment agencies often have a database full of candidates seeking employment. Partnering with an agency and following a temp to hire model allows you to hire temporary staff with the goal of determining whether they are qualified and suited for a permanent position with your company. This arrangement benefits both parties, by giving businesses and employees a chance to try things out before committing to a full-time position.
When to Consider Outsourcing Recruitment to an Agency
By now you will be realising how beneficial a specialist recruitment company could be to success of your business. If your internal team lacks specialised knowledge or experience in recruitment, outsourcing can be a viable option to bridge that gap. If you anticipate a surge in hiring needs due to expansion, seasonal demands, or specific projects, outsourcing recruitment can help manage the increased workload more efficiently. If your internal HR team is already stretched thin with multiple responsibilities, outsourcing recruitment can alleviate the burden and allow them to focus on other critical tasks. If you require recruitment support, we challenge you to assess and compare the costs of hiring in-house versus outsourcing to a specialist recruitment agency. Once you crunch those numbers, you’ll be surprised how outsourcing can be such a cost-effective option for your recruitment strategy.
How can we help support your recruitment needs?
Here at Talent ID, we offer a variety of recruitment solutions. Whether it be temporary employment or permanent placements, we are proud to partner with businesses in the Rotorua, Tauranga, Taupo and Hawke's Bay regions and get to know you and your businesses culture.
We can support the full recruitment process which involves managing the process from start to finish, a "quick-search" of our candidate database or we can short-list and assess the candidates who you have already identified through your own advertising process.
So, if are looking for a temp for a short-term project, or that ‘perfect’ person to join your team, contact us today to assist with your recruitment needs.
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