HR 13 October 2017

How to minimise risks and recruitment costs when hiring new talent

If a new employee is not a good fit and leaves after a short period of time, then your company will could face significant costs
If a new employee is not a good fit and leaves after a short period of time, then your company could face significant costs

Writing for Business Advice, Gareth Richardson, sales director at HR tool Hireabl, explains how smaller employers can maximise efficiency when hiring new staff, helping to minimise risk and recruitment costs.

In a highly competitive business arena where companies need to increase efficiency and agility in order to thrive, finding the right employees is of paramount importance.

Most industries suffer from skills shortage and security risks are higher than ever. In 2016, research carried out by IBM revealed that 60 per cent of cyber security attacks were carried out by insiders.

Furthermore, recruiting new talent is a time consuming and expensive process. According to a study by the Society for Human Resource Management, employers spend on average the equivalent of six to nine months of an employee’s salary in order to find and train their replacement.

Hiring costs vary by industry and region, but expenses like advertising, recruiters’ fees and hiring temporary workers before the replacement starts are more or less the same everywhere. At the same time, there are also internal costs that are difficult to evaluate:

  • HR time spent sifting through hundreds of applications and processing the replacement
  • Management time spent interviewing candidates

The recruitment process can take up to 12 weeks and the new employee will need up to 28 weeks to reach an optimum level of productivity.

If a new employee is not a good fit and leaves after a short period of time, then the company will have to face additional costs, including the cost to recruit and train a replacement, as well as the unproductive time that was lost.

So, what should employers do to avoid risks and reduce recruitment costs when hiring new people?

Thankfully, nowadays there are many smart tools available that can significantly reduce costs and time invested in recruiting whilst increasing the quality of the final short list of potential candidates for the role.

  1. Pre-screening

To save time and resource set up a clear set of criteria that are mandatory to be met by the potential candidates. They could be experience, education, location or whatever else you deem necessary.

Then let technology do its job – refine the search and provide a short list of potential talents.

  1. Testing

While resumes are a great tool for initial screening, they only show what the candidates want you to know.

If you want to uncover whether a candidate will succeed within the organisation you need to look beyond the resume and test specific skills, characteristics and behaviours.

Clearly define the qualities, competencies and job related skills of a successful employee and assess their capabilities through tests that can evaluate from literacy and numeracy abilities to emotional intelligence and management and leadership aptitudes.

This should help you identify those applicants who can demonstrate the practical application of their skills, knowledge, and experience.

The best part is that now you don’t have to invest time and coordinate several meetings for this stage. All can be done online and you only need to assess the results.

  1. Interviewing

Coordinating meetings between candidates and senior managers can be time consuming and delay the hiring process.

Try video recorded interviews that combine general and personalised questions your managers can then watch in their own time and make informed decisions regarding the best candidate for the role.

In this way you can also tap into a larger pool of talent as candidates can take the video interview no matter if they’re in a different city or country. 

  1. Trust but verify

Once you have a short list of top candidates suitable for the available role it’s time to do a final check up on their references and background information.

The old adage “trust but verify” has never been more useful as in our times when security risks are sky-high. There are many reports showing that resume fraud is on the rise so make sure your candidates’ information is valid and accurate.

  1. Doubts versus benefits

Many employers and HR specialists still have doubts whether technology is able to make “people decisions” and find the best talent.

However, smart recruitment technology does not aim to replace the human input, intuition and potential but can:

  • Bring objectivity and scientific rigour to the assessment
  • Standardise best hiring practices
  • Source better candidates
  • Enable candidates to demonstrate their skills and capability
  • Increase efficiency
  • Lower hiring costs
  • Eliminate the bottlenecks usually created by manual assessments

Read more about the hidden recruitment costs that reveal the value of employee retention

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