The cost of recruiting even one employee can easily reach $4,000 — at least that’s the national average. That figure is a tough pill to swallow for most small businesses, but investing in recruitment while focusing on “selective” hiring practices can provide greater returns. If you’re able to find talent that can excel with your business, you can experience a 7.5% increase in revenue and a 6.1% profit growth.
Unfortunately, many small businesses run on fairly tight budgets. They also operate without traditional hiring managers, leaving recruitment efforts to someone on the sales, marketing, or finance team. The person then tasked with the responsibility likely has little knowledge or time to spend on sourcing, screening, and qualifying candidates. This causes that unexpected recruiter to lean on job board subscriptions and other online resources that don’t offer much beyond matching talent to a job description that might not even reflect the open position.
As small businesses build teams to help them achieve ideal growth levels, it’s critical not to let a less-than-robust budget prevent you from finding the talent you need. Just explore alternative sourcing methods to find the candidates who can help make your vision a reality.
The Price of Misspent Opportunities
Most job boards, ads, or even sites like LinkedIn base the cost of a post on the number of clicks or applicants. As the number goes up, so does the price. In other words, you pay money for every unqualified candidate who decides to view your post or submit a résumé. Not the best use of funds for a business that might lack the experience, insight, or proficiency necessary to separate the wheat from the chaff.
Our company has worked with numerous businesses that left the hiring to department heads. While it can make the process more personal and meaningful, recruitment requires a more in-depth and data-driven strategy. This approach also left businesses paying for unqualified candidates for each job posting. As soon as they shifted to recruiting technology that sourced from a variety of dependable sources, they quickly realized the ROI of seeing only qualified candidates in their results.
Leaving recruitment to leaders also takes their time away from managerial responsibilities to search for talent from a list of candidates with varying degrees of “fitness” — be it in culture, skills, experience, or whatever other qualities you’ve included in the job posting. Their time is better spent leading their teams. For example, a manager at a Scandinavian insurance company relieved herself of administrative duties and was able to support her employees better while increasing sales by 5% in only three weeks.
Making the Most of Limited Funds
Recruitment can be a challenge even with large budgets, but small businesses shouldn’t fret. It’s more about tactics than dollars when it comes to finding the right talent to join your team. Here are four great places to start when recruiting with limited funds:
1. Invest in what’s working.
You might be working with a limited budget, but you can still make investments that improve your recruitment efforts. Sometimes, companies are already spending money on initiatives that don’t really contribute to the overall bottom line.
One study found that companies spend upward of $394 billion each year on digital technologies delivering inadequate ROI. Review your sourcing tactics and update your hiring processes to include only those strategies proven to be successful. Trimming fruitless efforts may reveal funds you can use elsewhere.
2. Test different tools.
Most technology companies provide free trials for their services. Not that you need to try every option available, but you should at least test out a few. In fact, 63% of companies say A/B testing is valuable for optimizing conversion rates.
If you want someone to take the desired action on a recruitment page, you need to determine the best approach. Testing does just that, and you can do quite a bit of it without upfront fees or long-term commitments to any one provider.
3. Leverage referrals.
When you don’t want to spend time recruiting in the current market, a referral program is often the way to go. Forty-eight percent of businesses say it’s their top channel for quality talent, and referred candidates are generally 55% faster to hire.
If you already have a referral program in place, give it another look to ensure you’ve incentivized participation enough to see results. Monetary awards are a good start, but you may also want to create a contest of sorts. Maybe offering team members a yearly chance to win a free vacation will encourage more quality referrals.
On average, the hiring process takes nearly 24 days; it can drag on in some areas of the country for more than a month. That’s a long time to ask someone to wait, especially when 80% of candidates would never reapply to an organization that failed to update them on a previous candidate search.
Look for ways to streamline the hiring process by eliminating steps. Try relying on digital tools to handle the grunt work, such as sourcing a larger volume of qualified candidates and automating communication with applicants. Use those resources to personalize that outreach and guide people through your pipeline in a way that keeps them informed without bogging down your process.
Considering the cost of a bad hire is estimated to be at least 30% of the individual’s first-year earnings, no business can afford to make poor hiring decisions. You need quality hires to move your business forward, which only happens when you invest in the right tools and resources to improve your recruitment process.
Are you looking for unique approaches to age-old talent sourcing conundrums? Download my company’s recent whitepaper, “The New Foundations of HR,” for insights on new and useful recruiting solutions that can help rejuvenate your talent pipeline.