How to Reduce the Cost of Hiring an Employee

By Robert Half on August 9, 2019 at 6:00am

The cost of hiring an employee isn’t just about the salary and benefits your company offers. And it goes beyond the budget you devote to advertising available positions, attending job fairs and other recruiting events, or even investing in technology to help manage your hiring process. The cost of hiring includes all the time that you and your staff must spend on the process — as well as any lost productivity the business experiences while a position remains open.

However, you can reduce your time commitment, and your hiring costs, by improving your approach to key steps in the recruiting process. Here are some tips for increasing efficiency to save you time, stress and money.

1. Write accurate job descriptions

It’s easy to underestimate the time it takes to create a job description that will help you land the best talent. Accurate job descriptions should both attract top candidates and get them excited about working for your company. Make sure your job description covers the duties and responsibilities of the role, as well as the required experience. If you’re willing to offer training to promising applicants, mention this, too, so that you can expand the talent pool you have to draw from. Likewise, if your skill and experience requirements are firm, say so. This will dissuade underqualified candidates from applying, decreasing the number of resumes you have to sift through.

You can also use this as an opportunity to sell your organizational culture by touting benefits, professional development offerings, flexible scheduling and other incentives to show candidates why your company is an amazing workplace.

Tip: Don’t wait until a position opens to develop a job description. Update them over time. Consider revisiting them during employee performance reviews to make sure details — from skills to responsibilities — are accurate. This process will also help you monitor how roles are evolving at your firm, so you can decide whether you should adjust job titles or compensation. When the time comes to hire someone new, you’ll have the latest information ready to go.

2. Schedule brief phone interviews

The cost of hiring an employee can rise when you spend time interviewing candidates who look great on paper but fail to impress in person. Resumes and cover letters will give you a look at a person’s work history and technical skills, and a peek at their writing skills. But doing some extra legwork to learn more about a promising candidate before considering face-to-face interviews can save you a lot of time and energy in the long run.

Tip: You can gain insight quickly and easily through short phone or video interviews. A 10- to 15-minute chat with a candidate can help you learn a lot about a potential hire’s personality and verbal skills.

Ask open-ended questions like, “Tell me about the last project you worked on, and what steps you took to make it a success,” or “What type of work environment do you typically thrive in?” These types of questions will prompt candidates to expand on their abilities, interests and preferences, giving you a better sense of whether they’d be a good match for the job and your organizational culture.

3. Work with a staffing firm

Another potential hiring cost is one that can significantly impact your company’s bottom line: the cost of a bad hire. When a recruit doesn’t work out, it can undermine productivity and send employee morale spiraling downward. A bad hire can also cause delays on existing projects, or the postponement of special initiatives that may have hinged on the new employee being part of the team.

Tip: A strategy many employers use to avoid bad hires and help lower their hiring costs is to work with a professional staffing agency. Robert Half, for example, has highly skilled, pre-evaluated job candidates with a wide array of expertise who are ready to begin working right away, either on a temporary basis or full time.

4. Move quickly

The longer you drag out the hiring process, the more it eats up your business’s resources and time. You also risk losing out on top candidates if the hiring process takes too long. In today’s competitive market, where top talent often receives multiple job offers, employers can’t afford to cool a candidate’s enthusiasm. Worst-case scenario, you have to go back to square one, starting the hiring process from scratch and investing even more time and money to fill the same job opening.

Tip: One way to ensure your hiring process moves at a steady clip is to set deadlines for key milestones, such as job posting closing dates, initial resume reviews, phone and in-person interviews, and a final decision. This will keep your team on task and can prevent hiring from being pushed to the side. Additionally, most job candidates will ask when they can expect to hear from you. Setting deadlines means you’ll have a timeframe to share with applicants, which can help maintain their enthusiasm for the position.

Recruiting talented people is always an investment, but it can deliver a high return, especially if you’re efficient in your hiring process. You can reduce the cost of hiring employees by using the tips above to attract, evaluate and onboard talented professionals who will be an asset to your organization.

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