Time is money: The true cost of hiring

by Sirius People

Image 2023 07 25 T00 59 01
Estimated Reading Time: minutes

Hiring at the best of times can be a challenge when you have your normal job demands:

  • You have your own KPIs,

  • You have to manage your team,

  • You have ongoing projects to complete,

  • You’re putting out the ‘fires’ in between employees in your organization.

Add in a pandemic, a disrupted economy and what once was that “thing on the side” that managers need to do to build a team or replace a former team member, and recruitment becomes a risky activity to hiring managers who don’t have the time, resources or the remote hiring process to find the skill sets required for your team’s needs.

The truth is, hiring a new employee is too costly of a risk to be that “thing on the side.”

Not only does it impact your team’s productivity, morale, cohesiveness and employer brand, it also has a major impact on your bottom line.

In fact, a bad hire can cost your business up to 2.5 times that employee’s salary, according to a survey by The Australian.

That’s why we wanted to make sure you understand why hiring can be such a costly risk to take — particularly if you don’t have the time or resources to do it right.

How long does it take to hire a new employee?

The bulk of the hiring costs aren’t actually creating a budget for your new employee’s annual salary and benefits that will be paid out in fortnightly or monthly installments over the next 12 months – it’s actually the up-front investment of having to source the candidate.

So, before rolling up your sleeves to go searching for a new candidate, here’s how many hours – broken down into each step of the hiring process – you can expect to spend recruiting for the role:

Defining the job description and key requirements (2 hours)

Arguably the most important step in hiring a new employee, as the job description (JD) is the complete, internal description of what the role entails and its relationship to other roles within your business and to your customer. It allows everyone involved in the hiring process to be on the same page about what the role requires before advertising the role, and will later set the benchmark for your new employee to be measured against.

Writing the job description (2 hours)

Once you’ve outlined the key requirements, go ahead and write the job description! The JD is essentially the ‘North Star’ of your recruitment process, as it’s the document that you and your team will be returning to at each stage of the hiring process to evaluate your candidates against the core role requirements.

You will also use the JD later in your employee’s journey at your organization, as it establishes the benchmark for your new employees’ performance reviews and compensation negotiations down the line, along with training and development opportunities. 

To learn more about how to write a concise job description to get the candidates you need, click here.

Get sign off on the JD from HR (1 hour)

Ensure that everyone is on the same page before going to market so you don’t attract the wrong candidates.

Write the job advertisement (2 hours)

Once you’ve gained sign off on the job description, go ahead and write your job post using the JD and your organization's Employee Value Proposition (EVP). As a job post is the external advertisement of an open position at your company, you will want to showcase the important motivators and key requirements and responsibilities to attract the best candidates for the role. 

Get HR to post the job advertisement (1 hour)

Upon completion of the job post, you then need your internal HR team to post the job ad on your company’s LinkedIn, SEEK, Indeed or Adzuna pages to attract the candidates you need. Posting on these platforms can cost your organisation up to:

  • SEEK: Minimum $285 + GST

  • Indeed: Pay per click for sponsored posts

  • LinkedIn Job Slots: Pay per click for sponsored posts (about $495 per 30 day listing)

  • Adzuna: $99 per 30 day listing for sponsored posts

Screen applicants (2 days)

A few days after the job advertisement went live, you will likely have a number of applicants to go through as you create a shortlist of your top picks. 

Field calls (1 day)

As soon as your job advertisement goes live, you will likely receive a number of phone calls inquiring about the position. Whilst these will not be all in one go, these distractions will cost you more than you think.

In fact, a typical office worker only gets 11 minutes between each interruption and it takes an average of 23 minutes to return to the original task after the interruption. Interruptions also increase your risk of making mistakes by up to 20 per cent, according to research by Carnegie Mellon University’s Human-Computer Interaction Lab.

Shortlist candidates (3 hours)

Once you’ve had time to screen applicants amid your daily job duties, meetings and additional call fielding, you then need to narrow down the list to those who you would want to invite to interview — also known as a shortlist. Typically, this includes your top three to five candidates.

Arrange interviews (2 hours)

Upon deciding your shortlist, you need to coordinate interviews with your desired candidates with yourself and your HR team.

Interview preparation (3 hours)

Before each interview, it’s imperative that you prepare some questions beforehand — cautious to not ask any of these illegal interview questions — as well as familiarising yourself with their CV to ensure that you’re not wasting valuable minutes asking them about skills and experience that you’re already aware of.

We recommend competency-based interviewing, where the candidate undergoes psychometric testing to match their core competencies against those required by the role to learn what areas the candidate is less strong in and what questions interviewers should ask to gain insight about these areas. 

To learn more about competency-based hiring, click here.

For tips on how to prepare a video interview as an interviewer, click here.

Conduct the interviews (5 hours)

Now it’s time to meet the people you spent hours trying to find! 

Be sure that you’re employing active listening and showing that you’ve prepared for the interview to ensure that even if you don’t end up picking that particular candidate that they leave with the best impression of your organisation. 

Providing feedback (1 hour)

After conducting all the interviews and deciding upon your desired candidate, call each interviewed candidate to let them know the outcome of their interview and to request referee information for the successful candidates. 

This will ensure that each candidate continues to have a good experience with your employer brand, no matter the outcome.

References (1 hour)

Before selecting your preferred candidate, it’s imperative that you take the time to call their referees to verify what they said to you during the interview and on their CV. 

Whilst this isn’t a fool-proof method of determining if a candidate is actually capable of success in their new role, it will confirm that to the best of their former colleague or manager’s ability that they were successful in their previous roles and will, therefore, have a higher chance of success at your organization.

Select the final candidate and close them (30 minutes)

If all goes well with your reference check, you can then go ahead and close your final candidate on working with your organisation! This also includes…

Keep them warm between the offer, receiving the contract and their start date (1.5 hours)

Chances are that if your final candidate has successfully interviewed with your organization — they’re somewhere along the way in other companies’ interview processes.

To ensure that they stay engaged with your organization, you will have to do regular follow-ups with them as they receive their contract up until they have their first day. (Then you have your onboarding and induction to ensure long-term employee retention.)

The total cost: 49 hours

That’s over a full working week to attract, select and hire a candidate — on top of your daily tasks, meetings and responsibilities!

Not to mention the cost of posting to job boards and the onboarding and training required to keep your new hire as part of your team!

And that’s if they choose to stay with your organization and you don’t have to go back to square one all over again!

Do you have a spare week to throw at recruitment and hope you get it right?

What if you need to hire more than one role at a time?

One week can slowly turn into three, four, even five weeks. 

Not only does this impact your ability to do your own job well — but it also takes a toll on your team!

Your team will have to pick up the extra work required of the role you’re recruiting for, exposing them to the potential of working additional hours, lowered work-life balance, employee burnout, and low morale. 

This may lead to more employees choosing to resign as the stress of taking on additional work becomes too overwhelming.

So, what’s the safest way to hire?

The cost of your full week’s wage plus the cost of getting recruitment wrong plus the intangible impact it has on your team’s morale (and subsequent employee retention) is less than a recruitment fee and a guarantee to find that perfect person for your organisation.

That’s why working with a recruitment partner is often the safest option for organizations looking to hire.

We realize that we’re a bit biased, but the numbers don’t lie!

What are the benefits of working with a recruiter

Apart from the obvious benefits, such as the time, money and productivity outlined above that you’ll save by outsourcing your hiring needs to an external person dedicated to finding the best candidates in the market, there a number of additional advantages you’ll gain by working with a recruitment partner:

  • Get the best person for the job — not just who is currently available: As specialist recruiters are actively seeking out the top people in their respective industry for a number of years, they are able to draw upon their wide range of candidate relationships to find not only those who are actively seeking new roles — but also those who are passively wanting to learn about new opportunities.

  • Increased contact with the candidate: During the hiring process, you may talk to a candidate three times, whereas a designated, specialist recruiter will talk to a candidate a minimum of 10 times to allow them to address concerns, motivators and their desired career path upfront. This encourages more buy-in from the candidates before they reach the final offer stage, and increases the chances that they will choose your organization.

  • Access to the top talent in the market through talent networks that have been built up for years: Great candidates are not desperate. They are likely receiving multiple offers and aren’t eager to jump into a new role. Working with a recruiter ensures that the recruiter is able to manage the candidate at each stage of the hiring process and that they’re able to use their industry knowledge to persuade the candidate to consider your company more.

  • Access to the latest recruitment tools and resources to ensure the best candidate sourcing and screening: Like with any service, those providing it have access to the best tools and resources on the market to ensure that they are competitive. When you work with a designated, specialist recruiter, they have access to tools, such as LinkedIn Recruiter, LinkedIn Talent Insights, AbilityMap, SEEK Market Insights, the Association of Professional Staffing Companies (APSCo) and more, as well as resources, such as checklists, eBooks and guides to ensure that your organization is fully equipped to attract, select, engage and retain a new employee.

  • Replacement guarantee: If for whatever reason, the candidate isn’t the right fit, the candidate decides the role isn’t right for them or there’s a significant change in the economy, you will be able to fill the role without paying an additional fee through a replacement guarantee.

So, if you’re thinking of hiring a new employee, please feel free to reach out to one of our specialist, APSCo-certified recruitment consultants for a free consultation

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