How often have you heard ‘ people are the foundation of any business?’ The results can be outstanding if you get the right people in place to perform and be aligned with your company’s vision.

But to recruit the best talent to your business, what does it cost?

We understand the factors that go into recruitment on top of planning and the onboarding process. Have you ever sat down and listed all the actions needed to recruit the right new employees.

The standard recruitment process may look like this: 

• Place an advert on various job boards
• Job fair fees and giveaways to create brand awareness
• Encourage and promote your refer-a-friend scheme
• Read through CV’s received for the position
• Make a shortlist and a long list of candidates
• Interview candidates
• Conduct appropriate assessments and references
• Offer the job position to the most successful candidate
• Set up the onboarding process for your new recruit
• Train your new employee.

If you are a small business and already wear many hats, recruitment can be a strenuous task, particularly regarding time and money. It’s not just about filling a job vacancy – it’s about finding the right fit for your company to help you reach your business goals.

How to calculate the cost of recruitment

When calculating the cost of recruitment, it’s not just a straight cut as the process outlined above. A new report by Oxford Economics found that replacing staff members incurs high costs for employers: £30,614 per employee. Two main factors make up this cost:

• The cost of lost output while a replacement employee gets up to speed
• The logistical cost of recruiting and absorbing a new worker

When accessing your cost of recruitment, it could also be an opportunity to look at ways to retain existing employees.

What are the hidden costs of bad recruitment?

• Resources spent on onboarding and training,
• Lost productivity of other team members,
• Possible increased staff turnover as an indirect result.

In a post-COVID era, recruiting qualified professionals has become more complex, so it’s an excellent start to calculate the true cost associated with your recruitment process.

How much does your recruitment process cost?

So we’ve looked at the process it typically takes to recruit a new employee. Now, let’s look at how much it typically takes to recruit:

• Salary, bonuses, packages
• Salaries of team members helping with the hiring process and onboarding
• Cost of referral system
• Cost of adverts – on and offline
• Onboarding costs – IT infrastructure/workstation

The cost of not getting recruitment right

Not everything goes to plan with the recruitment process, and when someone doesn’t work out, you are left to write off the recruitment costs and go through the recruitment process again at your own expense.

This can impact productivity and team morale and put projects on hold. The impact of a flawed recruitment process can have a profound effect on your business.

Mitigate recruitment risk and save money

The best way to avoid unnecessary recruitment costs and create a process to mitigate your recruitment risks includes putting solid systems and procedures in place across the process. With a few cost-effective strategies in place, you can save your business time and money and still recruit top talent. Consider looking at the following factors:

• How are you attracting candidates?
• Are you working with a recruitment company that truly understands your company’s vision, culture and strategic objectives?
• What does your onboarding process include?

Many businesses are choosing to use a recruitment agency to help make the process run smoothly – even companies with a strict no agency policy are now reaching out to recruiters to help with this unpredictable recruitment drive.

Working with an agency like Perigon Search, can help you manage your time spent on recruitment (plus save time), save internal costs and reduce the risks of a wrong recruit.

If you would like help with recruitment or have any frustrations you’d like to discuss, we’d love to hear from you.