In this article we’re going to take a look at the time it takes for a company to recruit employees directly and the costs that they may incur. We’ll also cover vetting/screening candidates and how costly it is when a company gets its recruitment wrong.
In the current climate, we have a seen a significant increase in the number of candidates applying for each position advertised and therefore a lot of time is spent reviewing CV’s and responding to applicants.
With 78% more applicants, it is in your company’s interests to pick the best people in the most efficient manner, saving time and money.
What Are the Key Recruitment KPI’s?
There are several Key Performance Indicators (KPI’s) to consider when running a recruitment campaign for a new hire and these could be the key factor to ensuring a successful outcome. Here are the main ones:
- Qualified candidates per hire: The number of candidates that make it through the first stage of a company’s selection process.
- Cost per hire: This is the average cost a company spends on hiring new employees.
- Time to fill: The number of days between the initial publication of the job vacancy/search to getting a job offer accepted by the successful candidate.
It is worth keeping track of these in order to see how much time and money you are spending on the recruitment process. Let’s look at them more closely.
Vetting Qualified Candidates Per Hire
Vetting for the right type of candidates is important so it is worth keeping an eye on your Qualified Candidates Per Hire KPI. The number of people passing the initial screening can tell you a couple of things. Firstly, if it is low, then you may not be attracting enough applicants that are suitable for the job post or it may be that the post is very niche and therefore limited candidates with the right skills or in the right location. Secondly, having a higher than average number of qualified candidates may extend the recruitment process longer than is acceptable for the company. Therefore for effective talent acquisition, a happy medium should be struck between numbers and quality.
Keeping Recruitment Costs Per Hire in Check
Recruiting costs per hire can be divided into internal and external costs.
Internal Recruitment Costs
Internal costs cover the staff referral programs and the wages of the recruiters, hiring managers and/or administrators. One should also consider the value of the time that it takes to assess CVs and cover letters, match/score against job descriptions and person specifications, prescreen and field candidate enquiries, create a shortlist, and carry out interviews. For some businesses, this process can take months. Who will be doing this process? HR? Hiring Managers? Do they have the capacity/time?
External Recruitment Costs
External costs include the cost of advertising the vacancies, background check fees and agency fees (should you want to employ an external recruiting agency). Costs can be higher in certain industries as a result of taking longer to find the right candidate with specific qualifications and experience.
Costs can be kept lower if you employ more people at a time, spreading fixed costs such as advertising. But professional recruitment consultants can also bring efficiency savings in that specialist recruiters are often able to provide a list of high calibre, pre-qualified candidates even without the need to advertise. They also provide a free advertising service as part of their offering and often are only paid upon results. Further, if you’re hiring for a role that is new to your business, an experienced recruiter can bring years of experience to help you identify the top skills needed for a role, helping with long term retention and productivity.
Monitoring Time to Fill
‘Time to fill’ is considered to be one of the most useful KPI’s for the recruitment process. It is a metric that allows you to plan the recruitment process more accurately. Delays to recruiting new staff may result in slowing company growth plans. Therefore making a detailed recruitment plan, allocating a realistic time-frame and setting a budget that properly covers costs will keep your recruitment process as efficient as possible.
With 32 years of recruitment expertise working with clients and candidates across Devon, Somerset, Cornwall and Dorset, we can save your business time and money by outsourcing recruitment to our specialist team of recruiters. With an expert in each professional vertical market, an extensive understanding of the skills and talent available across the South West and an excellent track record, the Cathedral Appointments team will work in partnership with you to deliver successful and cost effective recruitment solutions.