Recruitment Costs? The Truth About Your Recruiting Process and Profit

Recruitment costs: Yes agreed, it is a business expense after all.

When it comes to business growth there are multiple factors that contribute to how an organisation performs and recruiting the ‘right’ people is at the top of the list.

A great product or needed service is a given, however if the best people aren’t in place nothing will happen.

Recruiting and then employing a skilled, engaged and productive team is fundamental to an organisation’s success

"Growth is never by mere chance; it is the result of forces working together."

— James Cash Penney, founder, JC Penney

Having worked with hundreds of organisations since 1992 it’s clear that they do two things particularly well.

They develop their teams and manage progression within so that individuals can see a defined career path.
They recruit externally to bring in talent as they grow.

Recruiting has the highest business impact of any HR function so it is important to get it right.

An in-house recruitment team can work…….

Many organisations have their own internal recruiting department which can work provided
they are resourced properly to ensure they are able to keep on top of the complex recruiting process. Unfortunately, this isn’t always the case. Especially if the in-house team are dealing with multiple vacancies in different specialities.

As we have established that getting recruitment right will affect profit, it’s worth exploring the costs of going it alone versus partnering with a recruitment organisation; who can either work with internal recruiters or handle the entire process for the department or organisation in question.

I appreciate as an experienced recruitment company, working across a broad spectrum of companies from micro to multinational, our process has been honed and now has over 25 steps.

We make no excuse for that as our data tells us that when elements are missed this is when the recruitment process breaks down.

The real cost to your organisation

Last year we pulled together a document where we calculated the difference between the tasks, time and investment costs throughout the process of recruiting a new employee using ourselves versus an internal team without any support.

It wasn’t a huge surprise for our current clients to see the time savings. With any process, it’s the back and forth and what appears small inconsequential phone calls and research that take time.

Unfortunately, its these parts that get missed or prolonged; because internally there aren’t enough hands to help. The impact on the candidate of these missing elements is huge.

Back to the data…

The time savings were significant and this was based on one role only.

Take a guess at which scenario took 41.42 hours and which 10.75? Yes, you were right.

Does the odd missed call really matter in the bigger scheme of things?....... Yes, it does.

We are now in a ‘skills short’ business economy. This has a big impact on recruitment. It is the classic supply and demand market.

Therefore, the good candidates are often passive. Recruitment jargon for the fact that they are already gainfully employed and will need to be tempted to consider a move.

An uncomfortable story we have heard more than once

Last month a candidate rang in and asked if we would represent her. She was moving down from Glasgow to join her partner who had been promoted to a senior manager’s role in a well-known company in the area. She had found us online and liked our values and ‘style’.

What was interesting was that she did not want to approach any organisation directly. She explained that the last time she had applied for a role it was through a company advert.

It all seemed to be going well (this candidate is highly qualified with a huge level of experience by the way) and then the ball was dropped. Not once but multiple times. It boiled down to a lack of communication, organisation and planning on the organisations part. I know it can happen when people are overstretched and deadlines loom and it never bodes well. She withdrew her application; she knew her worth and felt totally ‘messed around’

In today’s market this person will then go somewhere else and likely talk about their ‘not great’ experience with the organisation in question. Often not in a malicious way, however it will soon spread around and in our new viral world faster than you realise.

The truth is people do love to gossip and especially if its negative.

One more thing…

We have talked about people = profits and clarified that it is about getting the right people in place in a market that is short on skills.

Placing an advert on social media or a page on your website, can and does work. Only remember you are fishing in a puddle rather than a pond.

Today it’s all about the search and having people with the capability to know who is good in the market and who is open to an approach.

Have you got the in-house skill and resources to do that at the level required?

At Lucy Walker we saw the market moving a long time ago. That is why we developed our team to be search and resourcing experts; so, you don’t have too.

Finally

A successful profitable business is based on having effective systems and processes in place. Recruitment isn’t a cost for your organisation it’s an investment and one that can be outsourced in such a way that it will improve your recruitment time frames putting more on your bottom line.