5 Ways to Decrease Hiring Costs When the Economy Reopens
One of the critical challenges that businesses will face as the 2020 economy reopens will be recruiting and hiring new talent on tightened budgets. While the cost of hiring can be high, the price of bad employees, inadequate training, and low retention rates are higher. Here are five ways you can decrease hiring costs while improving your recruitment efforts. Use this to discover budget-friendly hiring techniques that don’t compromise the quality of your hiring process.
1. Promote from Within
The average cost of hiring a new employee is $3,000 – $5,000, according to a report from SHRM. When you promote from within, though, you can reduce overall hiring costs significantly by cutting expenses such as:
- Posting job listings
- Vetting potential candidates
- Preliminary interviews
- Background checks
- Orientation and onboarding
Employees hired from within the company are typically already a fit with company culture and familiar with company policies, which saves time and money in the training process.
Additionally, employees promoted from within are 39 percent less likely to be fired from their jobs than external new hires.
2. Launch Employee Referral Programs
Hiring people referred by employees can reduce the time it takes to find and hire qualified candidates. For example, when someone vouches for a candidate, you can spend less time calling references, reduce the early stages of interviews, and simplify the background check process.
Employee referrals reduce the need for outside recruitment firms and lower employee turnover and reduce hiring costs.
To encourage employee referrals, companies can offer employees something as simple as social praise, which can help boost morale.
3. Utilize Hiring Software
Recruiting software helps cut hiring costs by expediting and automating several HR tasks, such as:
- Posting and publishing to job boards
- Spotting qualified applicants
- Communicating with candidates
- Scheduling interviews
- Getting approvals
Some platforms, like Workable, provide remote hiring features such as video interviews and screening features.
Hiring software helps streamline the hiring process and decrease the costs of hiring new employees.
4. Automate Employee Onboarding
Hiring expenses don’t end with “you’re hired!” The process of orientation and training is challenging, so finding ways to cut onboarding expenses without compromising quality is essential for companies working on smaller budgets.
Onboarding software such as Bamboo, WorkBright, and GoCo help streamline processes to save time and money on orientation and training. For example, GoCo software provides robust HR features such as benefits enrollment and payroll deductions with employee self-service options.
Onboarding software can reduce the manpower needed to enroll and train new hires, creating significant savings for businesses looking to cut hiring costs.
5. Consider Implementing Mentorship Programs
When you’re working with a reduced budget, as many businesses will be for the rest of 2020, it’s critical to consider how you’ll retain the new employees that you hire. Losing one worker costs an average of $15,000.
U.S. employers lost $617 to employee turnover in 2018, and more than three-quarters of turnovers were preventable, according to the Work Institute.
Starting a workplace mentoring program is an excellent way to improve your workers’ job satisfaction, boost their job performance, and increase your employee retention rates
Setting up a mentoring program for your business doesn’t take a lot of time or expense, but can result in substantial savings for your company.
Employee Resources and HR Automation Decrease Hiring Costs
Unquestionably, most businesses will be looking to do more with less as the economy reopens.
By promoting from within, launching employee referral programs, and utilizing recruiting and onboarding software, these companies can cut costs without compromising on the quality of its hiring procedures.