This year, talent acquisition teams across industries are facing a common challenge: the need to reduce hiring costs while maintaining the quality and diversity of the candidate pool. At the same time, they are increasingly annoyed by the unqualified candidates recommended by many recruitment agencies and the high costs associated with hiring mediocre candidates. We'll explore the strategies that top HR leaders and hiring managers are employing to attract a wider range of high-quality candidates while significantly reducing recruitment costs by up to 75%. 1. Prioritize quality over quantity of candidates
More applicants≠ better recruitment
While attracting the right talent is crucial, there's no need to accumulate a large number of applicants, and evaluating a large number of candidates can be more expensive than focusing on a few qualified individuals. For example, in a sponsored job posting, if you sponsor a job ad for 2 weeks, try shortening it to 1 week or less. Not only will this help you focus on all your candidates without rushing, but it will also shorten the hiring timeframe, which will naturally reduce the cost of hiring. Make sure your job description is detailed and specific to ensure that only the right candidates can apply.
2. Cut back on job boards
Recruiters' moments of desperation lead to desperate measures. For many hiring teams, this will eventually lead them to turn to job boards to find enough applicants for the position. They're investing more money on job boards than ever before, but they're not getting the same level of return at all. The survey found that while some hiring committees actually increased fees by more than 300%, job ad performance has actually declined since 2020.
A good strategy for TA teams is to move to an efficient HR software with integrated job board features, which can save you a lot of money compared to the cost of an individual job board subscription. By utilizing such software, you can quickly determine which job boards produce the best candidates, allowing you to optimize spending.
3. Use social media to attract candidates
Social recruitment has proven to be a cost-effective way to recruit. According to a survey, social media hiring is highly efficient, as 70% of hiring managers say they successfully recruited candidates through social media in 2023, and the process is often faster than traditional channels. HR software can streamline one-click posting to platforms like LinkedIn, Facebook, Twitter, and your company's career page, and having employees share these posts can increase click-through rates and attract more candidates at no additional cost.
LinkedIn is the main social media recruitment platform. Over the course of a week, about 40 million people applied for jobs on the platform, which is a significant number. With just 10% of that candidate pool, you can effortlessly identify the high-quality candidates you need to fill the vacancies. As a result, LinkedIn proves to be an excellent option for launching social recruitment efforts aimed at quickly fulfilling positions.
4. Choose automation over an external recruitment agency
While external recruitment agencies may seem like a cost-effective solution, they can become expensive in the long run. Recruiting software can help streamline day-to-day hiring processes, such as candidate procurement, resume screening, interview scheduling, and candidate management, with minimal or no additional costs, which not only reduces your hiring expenses but also gives you more control over the hiring process.
5. Arrange an online interview
In the wake of the pandemic, remote hiring and online interviews have become commonplace, and scheduling interviews online has eliminated the logistical costs associated with in-person interviews for many SME recruitment teams, and recruitment software can streamline the interview scheduling process, making it more efficient, and further reducing recruitment costs.
6. Encourage employee recommendations
According to the survey, 65% of job seekers would consider a job offer if they heard about it from a personal relationship. Employee referral programs are one of the most reliable and cost-effective methods of recruitment, with the highest conversion rate from employee-referred candidates to employees. On average, we see that they make up 40% of all new hires, although less than 10% of job seekers come through employee referrals.
Encourage your employees to refer candidates for job openings and reward them with rewards such as gift cards or bonuses after successful hiring.
7. Maintain the talent pool
Everything you do in your recruitment efforts should be about building the talent pipeline of the future, not just trading and filling open positions today. A candidate who may be a good fit for the culture, but currently does not have a suitable open position, should be stored in the talent pool for future consideration.
Imagine a scenario where a potential candidate who may not be the ideal candidate for the current position you are advertising but is fully aligned with your organizational culture expresses interest. Then, after six months, when a new job opening is closely tied to their skill set, you'll quickly get them on board. This results in an excellent addition to your team without additional recruitment costs, and the time required to recruit coincides with their previous employer's notice period, making this method of filling skills gaps extremely cost-effective and efficient.
8. Refine your candidate evaluation process
Implementing smart questions to screen and assess the skills of candidates applying for specific positions, automating this process in the recruitment workflow to identify and weed out unqualified candidates early, reduces recruitment costs by improving the quality of recruitment and streamlining the selection process.
You can send automated mass emails informing candidates if they will move on to the next stage, which can help you significantly reduce your hiring costs and of course save you valuable administrative time.
9. Monitor your candidate pipeline and other metrics
Recruitment analytics provide valuable insights into the efficiency and cost-effectiveness of your hiring process, and by tracking key metrics such as hiring sources, hiring time, candidate rejection rates, and talent pool data, you can optimize the hiring process and minimize costs.
If you're struggling to control hiring costs, here are the key questions you need to ask yourself this year:
How much does it cost per applicant for each of our recruitment channels?
Which channel has the most recruits?
Which channel provides the best return on investment?
10. Negotiation
In addition to the strategies mentioned in the article, hiring teams must also consider negotiation as a valuable tool to reduce hiring costs. This year, in particular, provides a great opportunity for organizations to re-evaluate and renegotiate contracts with a variety of service providers, including external recruitment agencies, RPO providers, job boards, and software vendors.
Negotiating a contract can save a lot of money. For example, through an external recruitment agency, companies can seek more competitive rates or payment structures based on performance. This approach not only ensures that they get the best value for their investment, but it also aligns the interests of the institution more closely with the company's goals. When it comes to job boards and software vendors, negotiations can lead to more favorable terms, reduced costs, or bundled services that specifically meet the needs of the organization.
In addition, the uncertain economic environment has prompted many suppliers to be more flexible and open to negotiation when seeking to maintain long-term partnerships. With the right negotiation strategies and a clear understanding of the desired outcome, hiring teams can get a more cost-effective solution while maintaining the quality of their recruitment efforts, and this proactive approach to contract negotiation is an important part of the overall cost-saving strategy and should be on the agenda of every HR and talent acquisition team to manage and reduce recruitment costs this year.
In conclusion, recruitment costs can add up quickly, with the right strategy and the use of recruitment software, you can significantly reduce expenses, reduce your cost per hire and ensure a cost-effective hiring process, monitoring your costs and making data-driven decisions will help you attract, hire, and retain the best candidates while keeping your budget under control.
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