How to Reduce Recruitment Costs: Top 3 Strategies

Recruitment is an essential process for any business looking to thrive and expand. But, it can also be a costly endeavor. From advertising job openings to the interview process and background checks, the expenses quickly add up. So, businesses are looking for ways to reduce recruitment costs.

According to the Society for Human Resource Management (SHRM), the average cost-per-hire in the United States is approximately $4,683. This figure varies widely depending on the industry, location, and the level of the position being filled.

Good news! There are some smart ways to lower hiring expenses without hiring less qualified people. So, you can save money while still finding great employees.

In this post, you’ll learn how to reduce recruitment costs in your business while still attracting top talent:

1. Use Social Media to Attract Candidates and Reduce Recruitment Costs

86% of job seekers utilize social media to search for jobs. Social media is one of the easiest and most cost-effective ways of attracting candidates, particularly younger generations like millennials and Gen Z.

One great thing about using social media for finding new employees is that it doesn’t cost anything. You just need to put in some effort to create the right messages and ads and interact with your followers.

If you’re willing to spend a little money, some social media platforms let you pay for ads that reach certain groups of people. So, whether you want to save money or invest a bit, social media can help you find the right talent for your business.

Before using social media to reduce recruitment costs, you need to figure out the right social media platform for your audience.

Many employers see LinkedIn as one of the most relevant recruitment platforms. A staggering 53% of recruiters believe that the quality of hire from LinkedIn is higher than that of other social media platforms. The image below shows how recruiters believe LinkedIn fares compared to other social media platforms:

USING THE RIGHT SOCIAL PLATFORM

Then optimize your company’s social media profiles. Ensure your profiles and posts reflect your company culture, values, and the benefits of working with you.

Regularly post your job openings on your social media channels as well. And to ensure they attract applicants, use HR software like IceHrm to improve your job descriptions:

Encourage your employees to talk about your company on social media, especially if you have job openings. When they share job ads from your company’s page, more people get to see them. This helps you find good candidates without spending money. So, it’s a free way to get the word out about job openings in your company.

This is also a great employee retention strategy. Highly engaged employers are less likely to leave their employer. Then there are the many other nice traits engaged employees have that help boost the company’s growth:

To ensure your employees know how to use social media to help you reduce recruitment costs in the first place, hold training sessions for them. There are membership platforms you can use to create your online course. The platforms also allow discussions and live streaming for the best learning outcomes.

2. Choose Automation over External Recruiting Agencies

Companies with lots of job openings often choose external recruitment agencies for quick and efficient hiring. These agencies have many people working to find the right candidates fast. But, using them can be expensive, especially when you need to hire many people quickly. These agencies charge a fee based on the new employee’s salary, which can be quite high. So, on average, companies pay around $20,000 as a placement fee.

You don’t have to spend that much money for efficiency in your hiring process. You can use automation tools, that are aligned with current HR statistics — which cost only from $100 to $300 per user — to streamline the process yourself. Besides, some recruitment automation tools even offer free versions. If you opt to use these, you won’t need to shell out money at all.

You can invest in an applicant tracking system (ATS) like IceHrm to automate routine HR tasks like candidate sourcing, resume screening, interview scheduling, offer management, etc.

3. Encourage Employee Referrals to Reduce Recruitment Costs

Asking employees to recommend people they know for job openings is a cost-effective and trustworthy way to find new employees. When your current employees suggest candidates they know, it helps you save money and time in the hiring process. So, it’s a simple and effective way to find the best people for the job.

Employees can refer quality candidates who not only meet the requirements of the position but also match your organization’s work culture and are more likely to stay with you for a longer period.

Referrals from employees boost the chances of a job match by 2.6–6.6%. Also, 45% of employees obtained through referrals remain with the company for more than 4 years.

To make your employee referral program work well, you need to encourage your current employees. You can do this by giving them rewards when their referrals get hired. These rewards might be extra money or more paid time off for the employees.

So, this way, your employees feel motivated to help you find good candidates. You can even offer more than one incentive at one time like this company did:

Make sure to tell your employees exactly what skills and qualities you need in new hires. Giving clear instructions helps them find the right people from their connections. Give them a link where they can upload resumes of people they know who are a good fit for the job. This way, your employees can easily refer the best candidates.

When employees recommend others for a job, it doesn’t just save money. It also helps to keep employees longer. People tend to stay in a company where they have friends and connections. So, employee referrals not only cut hiring costs but also make employees stay with the company for the long term.

Hiring can be expensive for your business. But if you use the right methods, you can cut down on these costs and still get the best people to work for you. With the right strategies, you can save money and find great employees for your company.

In this article, you learned tips on how to reduce recruitment costs in your business. You can use social media to attract candidates, choose automation over recruitment agencies, or encourage employee referrals.

Implement these cost-effective strategies. You won’t only save money but also build a stronger and more talented workforce that can drive your business to success. Learn more about IceHrm.