Is Your Business Haemorrhaging Money Because of Your Recruitment Process?
Have you just read the title and felt a niggle? Something isn’t adding up in your business, but when you look at the figures they seem straightforward enough. Your mind argues that you’re an ambitious business, so recruitment costs are bound to be high. But that niggle’s still there. Surely you should be getting more bang for your buck…
It’s a familiar story we’ve heard time and time again. And because of it, at The Curve Group we have made a point of supporting businesses as they scale. An undermanaged recruitment process is a leaky beast and can drain money out of a business without anyone realising. And though we know exactly how to stop that from happening, we also know that the key is recognising it in the first place.
1. You’re Sidestepping A Right-First-Time Recruitment Policy
Of course you know that getting the right candidate first time is ideal, but many businesses view that more as good luck than the result of a rigorous recruitment process. Here are a few examples of how the cracks can start to form:
- You’re relying on agencies that don’t know your business well enough to ensure the best fit is recruited each time
- In-house staff working on recruitment simply don’t have enough experience to establish or follow a robust recruitment process that will ensure the best candidate is appointed
- You’ve got such a backlog of vacancies to fill that you’re rushing your decisions
- Your employer brand isn’t strong enough to attract the best people
Other than the obvious cost of having to pay more to agencies to find replacements, you will be losing more money as a result of wasted induction time, training, and onboarding. Plus there is the additional cost from the loss of productivity … and that’s no insignificant amount. Read more about the benefits of outsourcing recruitment here.
In real terms, the average cost to employers of replacing a single employee is more than £30,000, and of that the greatest expense (more than £25,000) comes from loss of productivity caused by the time it takes – 28 weeks on average – for a new recruit to get up to speed
2. You Lack Internal Recruitment Expertise
Lack of experienced internal recruiters is not a sin – it’s understandable for businesses experiencing rapid expansion and a very common issue. However once spotted, it’s not something to just shrug off and accept. The obvious workaround is to push all hiring out to agencies; even the easy stuff. That is a short-term solution that will drain your bottom line. Initially, you may think that it’s cheaper to pay agency fees than fund a dedicated recruitment head in-house or outsource recruitment. However, you may now have reached a point where that tradeoff needs to be reviewed.
If you hire ten people a year on the average UK salary (£38,600) at a typical agency rate of 20%, you’ll spend an eye-watering £77,200 on agency fees alone and will not be tapping into any of the added value benefits you’d get if you partnered with an experienced recruitment outsource provider
3. You’re Using Multiple Agencies
It’s highly likely that as your business has developed, you’ve needed to recruit different specialisms. This often leads to multiple agencies making their way onto your Preferred Supplier List. Ad hoc negotiations will have lead to varying terms and rates, and some will be significantly higher than they should be now that you’re a larger organisation. Are you benefitting from buying power?
4. Internal Staff Are Bogged Down With Day-To-Day Recruitment Processes
As businesses expand, they often realise they need to hire their own internal HR personnel. However, more often than not, these employees get bogged down with day-to-day HR and recruitment activities – so much so that they struggle to get their heads above water to be able to focus on the strategic HR projects you hired them to deliver. Another common trend we see is that these HR personnel are generalists and are expected to do a bit of everything – meaning that they probably don’t specialise in recruitment or have the time to focus on setting up a future-proof, scalable recruitment process. Read the 10 signs that it’s time to outsource recruitment here.
It takes knowledge, experience and time to define a role, craft a job advert using the right language to encourage a diverse range of applications, advertise in the most appropriate places, sift through the responses, and narrow down a short-list. It takes expertise to identify, engage and secure the best candidates.
5. You Aren’t Hiring Fast Enough To Keep Up With Demand
Recruitment backlogs are costly for a business. As the pain of missed opportunities is felt, pressure mounts to make recruitment decisions too quickly. Both aspects are problems caused by a poor recruitment process, though they may not be immediately apparent when you look at the figures. However, when a business struggles to respond internally to peaks of demand because the in-house recruitment process simply isn’t scalable, the financial impacts are huge. Just think of the lost opportunity and productivity costs caused by the recruitment lag.
Keen To Find Out How To Cut The Cost Of Your Recruitment Process?
There are ways to overcome these costly mistakes, of course, and you’ll be glad to know it’s possible to benefit from the changes implemented pretty quickly. Download our free guide: 7 Ways To Reduce Costs By Improving Your Recruitment Process and you’ll find out how.
The Curve Group’s Recruitment Outsource service is ideal for businesses that need to recruit at least 20 hires a year and want to engage a professional partner to deliver the end-to-end recruitment process for them. Through our high touch, high quality, consistent and efficient service we find you the best talent quickly, leaving you to focus on your core business, freeing up time, people and money you can re-invest in your future.
Thinking about outsourcing your recruitment? Find out more about how outsourcing recruitment could transform your business here. You can also download our free business case to help you to decide if it’s right for you: