Written by Iliana Luca

11 June 2024

1:30 pm

Improve your recruitment process: 5 tips to reduce your cost per hire

On the hunt for a new employee? In the War For Talent, you really need to go all out. Recruiting a new employee requires a significant budget. Not only does your recruitment team need to be paid. To share your vacancy on a job board, you also pay a fee. Not to mention the marketing costs. It doesn’t stop. But couldn’t it be cheaper? Sure it can!

In this blog we will give you 5 tips to reduce your cost per hire. Let’s go! 🚀

What is the cost per hire?

The cost per hire, or CPH, shows you how much it costs to hire one new employee. It involves all costs directly or indirectly related to the recruitment process. Based on your CPH, you can assess the efficiency of your recruitment process.

How do you calculate your cost per hire?

To calculate your CPH, you add up all internal and external hiring costs. Then you divide the total by the number of employees. That’s how you know exactly how much it costs you to fill an open vacancy. With this knowledge, you can optimise your recruitment strategies.

So we separate internal and external costs. But which are those costs exactly?

Examples of internal costs are:

  • Salary costs
  • Workplace expenses for office chairs, among other things
  • Material costs
  • Software fees for an ATS, for example
  • Bonuses for referring potential candidates

Externally, there are also plenty of costs made to find the perfect match. These include:

  • Recruitment fees for working with a headhunter
  • Marketing costs to boost your online visibility
  • Licence fees

5 tips to reduce your cost per hire

Tip 1: Make your employer brand shine ✨

Okay, but how do you let your employer brand shine? It’s simple! Keep it real by reflecting authenticity and present a realistic image of the company atmosphere. Make sure to express your vision, mission and values. It’s way easier to work with like-minded people. So it’s best to look for people who support your message. Also immediately highlight what benefits you have to offer as an employer. Attract applicants in a single glance.

Tip 2: Build a talent pool 🏗️

Someone who isn’t retained now due to a lack of experience may have mastered the required skills in a few years. Someone who isn’t interested in a new job today could be looking for a new challenge in a few months.

Time you invest in a potential candidate now may not pay off until several months – or even years – later. Building a talent pool will always keep you one step ahead in the recruitment process. In addition, a talent pool also provides insight into which profiles are interested in your company. That’s useful information to adjust your employer brand as needed.

Tip 3: Use an employee referral programme 💰

Word-of-mouth advertising remains the most effective form of advertising. It’s worth gold! Your employees are the ones carrying out your company’s vision, mission and values. They can judge better than anyone who fits within the company culture. So be sure to let them know about any open vacancies so they can reach out to their network.

You can reward employees who introduce a suitable candidate through an employee referral programme. For such a programme, you could think of an Amazon gift card or a voucher for a trendy restaurant – the possibilities are endless!

Tip 4: Think about recruitment marketing campaigns 💚

Recruitment marketing campaigns are the perfect way to get potential candidates interested in your company and to take advantage of your employer brand. You can work with a selection agency or a marketing agency to do this. To keep your CPH as low as possible, you can also choose to set up a campaign yourself. That’s up to ten times cheaper, so definitely worth a try!

You can use recruitment marketing following two different strategies. Through job boards, you mainly reach active jobseekers. Your ads will lead them straight to the vacancy page. In contrast, passive jobseekers should not be confronted with a vacancy right away. It’s best to approach this group via a social media campaign. Introduce them to your values, vision and mission. Convince new talent that you’re a better employer. Draw attention and spark interest, convince them to come and work for your company.

Tip 5: Automate your recruitment process ⚙️

The recruitment process is time-consuming, many times candidates are still monitored manually. Posting vacancies on various job boards also takes a lot of effort. It’s much more efficient to automate all the repetitive work. Thanks to an ATS, not only can you keep track of every step of the recruitment process in a timeline. You can also post your vacancy from one central system to multiple job boards and social media at the same time.

Are you in the flow to lower your cost per hire? In this whitepaper you’ll find 21 tips to get started right away! 🚀

Take your recruitment to the next Level 👇