Learn How Outsourcing Full-Cycle Recruitment Can Reduce High Cost-per-Hire

Are you struggling with high costs every time you hire someone? This is a common challenge for staffing companies worldwide. In the U.S., the average employer spends nearly $5,000 per new hire, spread over 40 to 50 days covering everything from posting job ads to vetting, interviewing, and finalizing the hiring process.

According to a report by CIPD, the average cost of recruiting someone, including labor expenses, is £6,125. For senior manager roles, this cost can escalate to £19,000. Moreover, if the first hire doesn’t work out, you might end up paying double when you have to recruit again.

Before we delve into how outsourcing full cycle recruitment can help you in optimizing your costs, let’s first understand the concept of cost-per-hire.

Understanding Cost-per-Hire

Cost-per-hire refers to the total expenses incurred by an organization for hiring a new employee. This includes various components such as:

1. Advertising costs
2. Recruiter fees
3. Time spent by internal staff on recruitment
4. Administrative expenses

Calculating and minimizing this metric is essential for staffing companies to optimize recruitment efficiency and overall business productivity.

How In-House Full Cycle Recruitment Increases Costs

There are multiple costs and complexities that revolves around full cycle recruiting in house, including:

• Resource Allocation: Staffing firms allocate personnel, technology, and time to find candidates internally, which increases operational costs.
• Expertise and Skills: Specialized recruitment skills are needed for effective in-house sourcing, requiring investment in training or hiring experienced recruiters.
• Technology and Tools: Staffing firms invest in sourcing platforms and applicant tracking systems, which contribute to operational expenses.
• Increased Competition: Proactive recruitment strategies like attending events or leveraging networks are used, adding to costs due to competition for top talent.
• Time and Efficiency: In-house sourcing can be time-intensive per hire, leading to higher costs due to extended recruitment processes.
• Reduced Dependency: Staffing firms gain autonomy but must handle all sourcing internally, which increases operational expenses.

Each of these steps demands time, resources, and specialized skills. Moreover, prolonged vacancies can lead to decreased productivity and revenue losses for the organization.

A Step Towards Outsourcing…

Outsourcing your full-cycle recruitment needs more than a few benefits, here are some of them listed below:

• Access to Specialized Expertise: Recruitment agencies specialize in talent acquisition. They possess industry insights, extensive networks, and efficient methodologies to attract and retain top talent. This expertise leads to quicker and more effective hiring processes.
• Cost Reduction: Outsourcing recruitment can result in significant cost savings. External agencies can leverage economies of scale, reducing overhead expenses associated with internal recruitment teams. This translates into lower cost-per-hire metrics for businesses.
• Enhanced Time-to-Fill: External recruiters are dedicated solely to sourcing and hiring. They can expedite the hiring process by leveraging their networks and technologies, ensuring quicker placement of suitable candidates.
• Scalability and Flexibility: Outsourcing provides scalability, allowing organizations to adjust recruitment efforts based on fluctuating hiring needs. This flexibility is particularly advantageous during peak recruitment periods or when specific skills are in high demand.
• Reduced Administrative Burden: By outsourcing recruitment, internal HR teams can focus on strategic initiatives rather than being bogged down by day-to-day hiring tasks. This leads to increased productivity and efficiency across the organization.

How Does Outsourcing Work?

Outsourcing involves partnering with external agencies or recruitment firms that specialize in talent acquisition. The process typically includes:

• Initial consultation to understand hiring needs and organizational culture.
• Developing tailored recruitment strategies
• Sourcing, screening, and interviewing candidates.
• Coordinating interview schedules and providing feedback.
• Handling offers, negotiations, and onboarding processes.

Conclusion

Outsourcing your full-cycle recruitment can really help streamline your hiring process. Companies like QX specialize in this area and can save you money while finding great talent for your team. They have the expertise to make hiring more efficient and cost-effective. If you’re interested in learning more about how QX can reduce your hiring costs and improve quality, just fill out the form below, and we’ll reach out to you soon.

Originally published May 08, 2024 08:05:08, updated May 08 2024

Topics: Full Cycle Recruiting, Full Cycle Recruitment, Outsource Full Cycle Recruiting