Is There Pressure to Reduce Costs in Recruitment?

Today on the blog we’re asking whether there is a real drive for recruiting companies to recruit with direct, more cost-effective methods – or whether they’re happy to use traditional channels.

The way we see it, companies have three key drivers when it comes to recruitment;

One – Finding the right people.

Two – Finding them quickly and efficiently.

Three – Finding them at an acceptable cost.

These drivers do tend to be applied in this order (with number one being the most important), but of course there are big differences between companies.

Moving a little bit further, we believe that there are three barriers that get in the way of this process.

The first is ease. It’s easier for companies to use the people or the channels that they’ve always used.

The second is fear. Many companies are fearful of creating and booking campaigns that make use of new media. This can be because they are unsure of the terminology or even the right advertising media platform to use.

The third is time. Most hiring managers are very time poor and worry that online advertising, though more cost-effective, will need a much bigger time investment. The worry of increased applicant numbers often drives them back into the arms of recruitment agencies – who will handle more of the process but for a much bigger fee.

However, recessions often drive a re-assessment of these processes. The end of the last downturn in 2002 saw the job board begin to rise in popularity, and the previous downturn spelt success for Recruitment Process Outsourcing. This time round, economic questions are being asked and new approaches, like ours, are beginning to rise.

Within big businesses, it tends to take a very strong lead from the top in order to drive a review of recruitment costs. When businesses do take the initiative to do this; the benefits can be huge. Recruitment agency costs are typically 15% or more of the salary of the candidates recruited. In the professional sectors, this equates to many hundreds of thousands of pounds; a huge expense which greatly affects profit. Recently, the consumer goods company Diageo announced that they had reduced their agency spend by 70% - a saving that will have equated to millions of pounds.

Let us give you a few more statistics, this time from clients who have made huge savings through our recruitment process:

• This year we have saved a major infrastructure client a minimum of £300,000.

• For GTA, we filled thirty vacancies over a four month period for a total cost of £10,000.

• Dow Jones used us to fill twelve roles. The £115,000 they saved went straight to their bottom line.

In fact, our fees normally equate to a 90% saving of the equivalent service from a recruitment agency.

Put simply, companies who are taking that strong lead should look to us to help them reduce their recruitment costs. As should those companies who haven’t yet done so! And if your company doesn’t plan on taking the lead in this respect, ask your financial director how important these savings could be to your bottom line... and then look to us to help!