The importance of effective recruitment for companies
Recruitment is an essential aspect of human resources management for companies. Finding and selecting the right candidates can have a significant impact on an organisation’s performance, productivity and profitability. But such a process has a cost, and, as a recruiter, you have to incur significant expenses to attract, assess and hire the talent your teams are missing.
Exploring the cost of recruitment and how effective recruitment software can reduce these costs
Traditional recruitment can be time-consuming, costly and a source of many imperfections, slowdowns and errors. But specialised technological solutions do exist: recruitment software. Recruiters now have the opportunity to streamline their processes, cut costs and improve the quality of their recruitment;
Let’s take a look at how companies can make savings on their recruitment costs by using a high-performance recruitment software.
The cost of recruitment: a reality for companies
Definition of the various elements making up the cost of recruitment
The cost of recruitment covers all the expenses associated with the process of hiring a new employee. It is not just limited to the cost of publishing job advertisements, but also includes other essential aspects that cannot be compressed without the help of a dedicated tool. Here are some common factors that contribute to recruitment costs:
- Job advertisement costs:The cost of placing advertisements on online platforms, in newspapers, specialist magazines or via recruitment agencies is an unavoidable expense when it comes to attracting potential candidates.
- Working time : The time invested by recruiters and HR managers in drafting job advertisements, searching for candidates, shortlisting CVs, interviews, appraisals and salary negotiations is a crucial aspect of the cost of recruitment.
- Tests et évaluations : L’utilisation de tests psychométriques, d’outils d’évaluation des compétences, de vérifications des antécédents et d’autres méthodes d’évaluation peut générer des coûts supplémentaires.
- Drop-out rates and recruitment mistakes: If potential candidates drop out of the process along the way (often because it’s too slow and they’ve found somewhere else), some of the work done will have been for nothing. Worse still, if the recruitment is a mistake, the whole process will have to be repeated, including onboarding and initial salaries.
Statistics and figures on average recruitment expenditure
According to various studies and research, recruitment expenditure varies according to the size of the company, the sector of activity and level of position sought. Voici quelques statistiques clés surtout issus d’outre-atlantique, il manque malheureusement d’étude sérieuses et sourcées en France :
- According to a study by the Society for Human Resource Management (SHRM), companies spend an average of $4,700 on recruitment. But many employers who have carried out in-house studies say that this cost can represent two to three times the annual salary for the position to be filled (here, we are talking mainly about large companies; these amounts were mentioned by Elie Golderg.
- According to a survey by Bersin by Deloitte, large companies can spend up to $10,000 per hire, while small and medium-sized businesses typically invest between $1,000 and $5,000 per hire. In France, these amounts are more or less the same.
- A study by CareerBuilder found that the average cost of a bad hire is $17,000 and can be as high as $50,000 in terms of training, lost productivity and impact on the team.
Analysis of the main factors contributing to high recruitment costs
Several factors can lead to high costs in the recruitment process :
- Le temps de vacance des postes : Plus un poste reste vacant longtemps, plus les dépenses de recrutement s’accumulent. Companies are often faced with productivity losses and increased workloads to compensate for vacancies. Optimiser le processus de recrutement est vital pour réduire les coûts.
- High volume of applications: Sorting through and assessing a large number of applications can be time and resource consuming, increasing recruitment costs if recruiters don’t have a good ATS..
- Mistakes in selection : Poor selection of candidates can lead to high staff turnover, resulting in additional expenditure on re-hiring and training new employees.
- The time it takes to process applications: if one or more people in your HR department have to spend several days working to fill a post, that’s time they can’t spend on the rest of their job.
- Recruitment agency fees: Some companies use external recruitment agencies that charge fees to find qualified candidates. It’s more of a deferral of investment than a cost: you’re paying another company to reduce the working time of your own HR team.
Clearly, the cost of recruitment can represent a significant financial burden for companies. You might think that this is not a problem for the biggest structures, but this is not true: on a pro rata basis, as a percentage of a company’s income, the difference in recruitment costs is not that great. While an SME will have a recruitment cost of around €3,000 two or three times a year, a large group will have a higher recruitment cost (more applications, more HR staff, more stages, onboarding costs, etc.), but for dozens or even hundreds of recruitments a year.
But there are ways of reducing these costs and optimising the recruitment process. Examinons comment un logiciel de recrutement performant peut contribuer à cette réduction des coûts.
The inefficiencies of the traditional recruitment process
Description of typical stages in the recruitment process
The traditional recruitment process generally involves several stages:
- defining and planning staffing requirements
- drafting and distributing job offers
- pre-selection of candidates
- assessments and final decision-making.
Although these steps are essential, they can often be subject to inefficiencies and additional costs.
Identification of common problems leading to additional costs
- Tri des candidatures : Le tri manuel des candidatures peut être fastidieux et chronophage. Recruiters have to go through numerous CVs to find the most relevant candidates, which can lead to additional labour costs.
- Communication and coordination : Coordinating schedules for interviews, email exchanges and telephone calls with candidates can be time-consuming and, if not organised by a well-functioning system, a source of confusion and errors..
- Ineffective assessments: Candidate assessments can be subjective and unreliable, leading to costly selection errors. What’s more, manual tests and assessments may involve additional costs.
- Delays in the recruitment process : Delays in the recruitment process, whether delays in decision-making or in coordinating the steps, can extend the time that positions remain vacant, resulting in financial losses for the company.
Examples of financial losses due to ineffective recruitment
- Loss of productivity: Ineffective recruitment can lead to delays in replacing vacancies, which can have a direct impact on business productivity. The remaining employees may be overworked, which can lead to a drop in the quality of work and a reduction in job satisfaction.
- Additional training costs: Hiring unsuitable or poor quality candidates can lead to increased training costs to bring them up to speed or familiarise them with the company’s specific processes.
- Rehiring costs : If a newly recruited candidate leaves the company prematurely due to a poor fit, rehiring costs such as re-publication of vacancies, additional interviews and new assessments will have to be borne.
It is clear that the inefficiencies of the traditional recruitment process can lead to significant additional costs for companies. Mais, bonne nouvelle, les logiciels de recrutement existent. The use of high-performance recruitment software (ATS) will remedy these problems and reduce recruitment-related costs.
How do we do it? We explain it below.
The impact of high-performance recruitment software on recruitment costs
The benefits of high-performance recruitment software
A effective recruitment software can bring many benefits to businesses, particularly in terms of reducing recruitment-related costs. Here are some of the main benefits:
- Automating tasks: Recruitment software like Jobaffinity can automate many time-consuming tasks in the recruitment process, such as sorting CVs, scheduling interviews, sending follow-up emails, etc. This allows recruiters to save time and concentrate on higher added-value tasks.
- Centralisation of data: Recruitment software centralises all recruitment-related data, including candidate CVs, assessments, interview notes, etc. This facilitates access to relevant information and enables faster, more informed decision-making. You can also set up pools of candidates for future recruitment.
- Simplified collaboration: Recruitment software enables effective collaboration between members of the recruitment team. Ils peuvent partager des informations, évaluer les candidats de manière collaborative et communiquer plus facilement en ayant toutes les données centralisées. This reduces delays and communication errors.
- Improving the quality of hires : Our Jobaffinity ATS incorporates advanced assessment and filtering tools (to find out which ones, see our partners page), such as psychometric tests, gamification, data extraction and skills assessments. All this will help you to identify the best-qualified candidates for the job. This reduces the risk of hiring unsuitable candidates and helps reduce training and re-employment costs.
Statistics demonstrating the effectiveness of recruitment software in reducing costs
Studies and statistical data confirm the effectiveness of recruitment software in reducing costs. Here are some interesting statistics:
- According to a study by Aptitude Research, using recruitment software can reduce recruitment costs by an average of 25%.
- Selon une recherche de Jobscan, 98% des entreprises du Fortune 500 utilisent un ATS
- A survey conducted by Capterra has revealed that 86% of companies using recruitment software have seen a significant reduction in recruitment costs.
- According to a study by Bersin by Deloitte, companies using effective recruitment software can save up to 50% on recruitment costs compared to companies using traditional methods.
Here’s an infographic from Capterra (a website specialising in business software consultancy, the link to the study is in point 3 above) on the benefits of recruitment software, translated by us.
Moving on to recruitment software
It is essential to understand that recruitment is a strategic investment for any company. Effective recruitment helps to identify and select the most suitable talent, which has a direct impact on productivity, quality of work and the company’s overall success. However, the costs associated with recruitment can be significant.
High-performance recruitment software offers an effective solution for reducing recruitment costs. By automating tasks, improving data management, fostering collaboration and optimising assessment processes, this software streamlines and optimises the recruitment process.
In a world where competition for the best talent is fierce, so it’s crucial for businesses to remain competitive and reduce recruitment costs.
We therefore urge companies to seriously consider adopting high-performance recruitment software tailored to their specific needs. This will enable them to maximise their resources, optimise their economic performance and recruit the best talent to ensure their long-term growth and success.
Don’t hesitate to ask us for a free demonstration of our tool to see how it will help you!