Looking to recruit?
Looking to recruit? What's the first thing you think about?
For most companies the answer to that question will be, How much will this recruitment campaign cost?
This will then invariably lead to discussion regarding agency fees and advertising costs.
As a general guideline agency fees will typically cost you 15-30% of the salary, however this figure will be higher if you use an executive search agency. Some companies look to reduce this cost by running their recruitment in-house, hence cutting out the agency.
Recruitment Process Outsourcing (RPO) Solutions are another popular money saving option. This is when a provider acts as a company's internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the on boarding of the new hire, including staff, technology, method and reporting. A properly managed RPO will improve a company's time to hire, increase the quality of the candidate pool and provide verifiable metrics.
But by focusing on agency and advertising costs are companies losing sight of the other costs involved in this process?
Lets think of other key issues that need to be considered. How about the actual hiring time? If you consider from advertising to appointment a process can typically take 10-12 weeks then that’s a lot of time to have a position unfilled. Loss of productivity and the financial cost to the company from having unfilled roles then leads to other issues. Some firms choose to use temporary staff to stand in until the ‘ideal candidate’ is found. This represents another huge cost.
Take the recent partnership between CVWOW and Tesco maintenance. Due to spiralling agency costs Tesco were not recruiting enough full time staff. However this meant they were using more temporary contractors and this, in turn, was costing Tesco an estimated 42% more than their average paid technician. The increasing number of contractors and lack of full time appointments was a trend that had to be reversed due to the high costs involved. By cutting down on the number of contractors Tesco saved £1.6 million on their annual recruitment spend.
Consider also the management time that is also involved in recruitment ranging from specifying the role through to interviewing, and after all this what happens if your new hire leaves within a year? Even more cost!
At CVWOW we recognise the importance of a consultative approach to recruitment and that this approach can decrease the possibility of you recruiting the ‘wrong person’. Our representatives visit organisations to get a feel for your company, brand, resources, culture, timescale, skillsets and budget before presenting a recruitment solution.
It is important that before you embark on your next recruitment drive, whether using an agency or recruiting in-house, that you consider all the cost factors and the potential implication to your companies productivity and budget.
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Author: Matthew Holley
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