Recently in our HR Equity Slack, we were asked: “Does anyone have a good tool to calculate the cost per hire?” The topic of hiring and the cost associated can put quite a strain on growing businesses and their finances. At HR Equity, we believe your most impactful resource is people, and hiring the correct people will make or break your company.
People cost a lot. On average, it costs $4,129 to fill a position in the United States per Society of Human Resource Management. When you need to scale your business quickly, it can be challenging to think about how much money or time to put in it. Some companies fall in the trap of outsourcing the project to the wrong people, who scour the web trying to find anybody who they deem can pass on a hire. The result is a weak candidate for your position, and it becomes a continuous cycle. Our goal for your company is to put an end to spinning your wheels and get back to performing with a team and people who are ready to succeed. Here are a few tips to keep you on track.
Start by tracking the number of positions that you filled from employees within your company. If the stats alarm you, consider changing your internal job board or creating one. The more a company saves by hiring within, the faster the time to productivity can be. Designing realistic jobs could be a critical missing detail. When drafting job descriptions, be practical on how many years of experience someone will need to perform that role and how the salary represents the value of the role and compares to the industry. Work simulation testing can be a more significant benefit, then interviewing and is often neglected. Harvard Business Review cites that economists Mitchell Hoffman, Lisa B. Kahn, and Danielle Li found that even when companies conduct such tests, hiring managers often ignore them, and when they do, they get worse hires.
Do not fall victim and implement these habits, track which systems are you use, and which have shown the most success. Monitoring the recruiting process to identify where the best candidates are coming from and tracking their performance can give your company a competitive advantage over others.