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Every business needs to recruit employees.
Employees are the ones that make a business thrive
and determine how successful it will be in the future.
Our very own CEO Ben Thompson in a recent webinar
we hosted on business compliance stated,
‘We always say that people are the foundation of
businesses; if you can get your people to perform at
The Hidden Cost of
Recruitment: What’s
Recruitment
Costing You?
HR Leadership & Management
27th September
2019
Charlotte Shaw
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the top of their game, the results are outstanding.’

comes at a price. Today, we
e hiddn recruitment costs you mignot know about, and discuss the more cost-effective
ways to hire new employees into your business.
We’re here to make sure you do right by your
business the next time you need to hire top talent. To
start off, let’s look at all the hidden recruitment costs
you need to bring into the equation.
Hidden recruitment costs?
There are a number of factors that go into the
recruitment process, on top of planning and
onboarding a new employee. As a hiring manager,
your company or department may require you to
outline various costs associated with this task, so
we’re going to break the costs down for you.
#1 The monetary cost
The actual monetary cost of recruitment comes first.
This includes;
These are some of the biggest costs of recruitment
and arguably are the easiest ones to identify and price
up. When you add everything up, the average cost of
a new hire can be anywhere between $3,500 to
$5000.
#2 Time invested by staff during the
hiring phase
• Salary of your recruitment team
Salaries of extra team members involved in the
hiring process
•
Internal commissions or referral bonuses you
might have set up
•
• Advertising and online job board costs
Investment of software that you use to hire
employees
•
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In business, time is valuable. Whilst you may already
have allocated a certain financial cost to recruitment
including the items we listed above, it is easy to
underestimate the time it takes to hire a new recruit.
These elements of the recruitment stage, although
they don’t come with a physical price tag, still add up
in time lost for current employees.
#3 The recruitment cost of “bad” hires
A new hire who doesn’t quite “fit” can be costly to your
business – this could be someone that just doesn’t
work out in the role and either leaves the company on
their own, or is asked to leave by the business.
This will not only mean having to start the hiring
process again, but it can also lead to less productivity
amongst remaining staff, lower employee morale and
it puts existing projects on hold. The recruitment cost
associated with this can be profound for your
business!
To make sure you don’t have to deal with this
particular hidden cost of recruitment, here’s a handy
guide on how to make sure you hire the right person
for an upcoming role.
Writing, creating and posting to and promoting
the job ad to networks will take a lot of time
out of your hiring managers day-to-day tasks.
•
During the time you are hiring, there is either
no productivity in the role you are hiring for, or
limited productivity. If the hiring process takes
longer than usual, this extends the lost
productivity time and output for your company.
•
Time taken out for filtering through applicants
may take a considerable amount of time.
•
When you do finally reach the decision to hire
someone, the negotiation stage can draw out
the process longer, leading to more HR wages
allocated to the hire, and productivity and
output lost in the role you are hiring for.
•
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#4 Outsourcing costs
This one won’t apply to everyone, but many
companies are looking to outsource the hiring process
to recruitment agencies to avoid all of the above costs
associated with hiring the wrong person.
Recruitment agencies have an advantage over inhouse recruitment as they tend to have bigger and
better industry networks, contacts, databases, and
manpower invested in recruitment.
Whether or not you choose to recruit in-house or
through an agency, be sure to factor in the extra time,
energy and effort outside of the financial recruitment
cost.
The most cost-effective
recruitment strategies
Now, every business wants to save money. And as
you can see, with the mixture of monetary and timely
recruitment costs it can add up to a hefty bill. So we
want to run you through some of the more costeffective recruitment strategies that can save you a
few dollars (and minutes) when you next need to hire.
Recruitment Referrals
A cost-effective recruitment strategy is leveraging your
current workforce to refer hot candidates. This can be
through their friends, families, former colleagues or
just their growing networks. The benefit of this
strategy is that your employees would have already
done half the sense checking for you! And it’ll cost a
lot less than using an agency or outsourced strategy.
In order to really engage your employees into the
referral scheme, we suggest setting up some sort of
incentive. That means if their referral is successful they
will receive some sort of reward. This can be
monetary, time-dependant, whatever works for your
business and your budget.
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Brand Ambassadors
Another tip that goes hand in hand with recruitment
referrals is turning your current employees into brand
ambassadors.
Jobseekers are no different from the average
consumer of a product. In the same way as they would
when buying a new pair of shoes, they will do their
research on a business before applying for a job. They
might ask colleagues, peers and friends for their
impression of a business, consult their LinkedIn
connections or read reviews on Glassdoor for insider
knowledge.
Therefore employee advocacy has the potential to be
a very powerful yet inexpensive recruitment tool for
your business.
Social Media
Social media is a cost-effective recruitment strategy for
an obvious reason; it’s free to post. Create a cool,
attractive graphic that will get people to stop dead in
their newsfeed and read all about your exciting new
role.
You can again focus on the power of your existing
workforce and get them to like, comment and share to
post to their networks. This way you’ll reach even
more people (again for free!)
When it comes to social media posting, remember;
Video content is very important, they’re more
effective in grabbing people’s attention in the
newsfeed and favour the algorithms much
more. Perhaps you could film the department
head explaining the available roles within their
team? Or get one of your current employees to
shoot a fun testimonial video about why they
love working for the business. The more
creative the better.
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Job Fairs and Industry Conferences
Job fairs are a low-cost way to find employees.
Whether you decide to attend a live or virtual job fair,
you don’t necessarily have to invest in a large,
expensive stand. You could just attend and simply
network with other visitors on the day. Bring some hot
off the press business cards and your networking
expertise, and that’s all you’ll need.
Similarly, attending industry conferences and trade
shows that aren’t centred around recruiting is a great
cost-effective recruitment strategy. You can talk to
potential employees through networking at these
events. As well as meet with others who work in a
related industry that may give you the ability to tap into
potential candidates.
Recruitment Tools
If you don’t have the right tools at your disposal for
your recruitment needs, your ability to hire costeffectively will be hampered from the start. Although it
might seem like a big up-front cost, if you invest in a
robust applicant tracking system (ATS) – such as
JobAdder – you will be able to streamline your
process, reduce duplication of work and data entry,
protect candidate data and better comply with the
requirements of the GDPR. It’s a win-win-win-win
scenario!
Create job ads that speak for themselves
The job advert that potential candidates see, whether
that’s on your website, a job board, or on social media,
will be one of the first experiences they have of your
business. So it’s vital that you create an on-brand,
Don’t be afraid to use mages! Graphics are
important for social media posts, so ensure
images are incorporated into your social media
recruiting strategy.
•
• The power of hashtags is real!
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appealing and engaging job ad. One that really stands
out from the crowd.

o be well written, but it also
pellingoptimised for search, and
clearly outlines the job’s key requirements and
responsibilities. With the help of our amazing friends at
SEEK, we’ve created a great guide on how to create
the perfect job ad. With the right job ad, you can invest
minimal amounts of time and money into promotion.
Reduce the need to recruit
The final cost-effective recruitment strategy we want
to highlight might sound a little strange. But one way
to really cut costs is to simply reduce the need to
recruit in the first place!
This can be done by improving the way you support
and engage your existing employees. Supporting
them with internal training, upskilling opportunities, as
well as incentives, will overall improve your company
culture and employee engagement levels. This, in
turn, lowers your staff turnover and therefore reduces
the need to recruit in the first place!
The Wrap Up
As you can see, there’s a lot more hidden recruitment
costs than first meets the eye! But with a few costeffective strategies in place you can save your
business time and money and still recruit top talent.
If you want more information about recruitment and
how you can use your awesome employer brand to
attract top talent – take a look at our webinar here.
Employer Brand: The Secret to Attracting and
Retaining Top Talent
Charlotte
Shaw
Talent
Acquisition
Specialist
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