Hiring costs takes up a large part of the overall HR budget. Throughout the year the HR professionals spend considerate amount of time in planning and ensuring the amount spent is used as effectively as possible. It is therefore necessary for the recruiters of your organization to understand the cost (External & Internal) incurred in the hiring processes to implement correct processes and lower it. The official recruiting formula for calculating Cost per Hire is:
Cost Per Hire = (External Costs + Internal Costs) / Total Number of Hires
– External Costs: Cost incurred in direct recruitment advertising, job fairs & job boards, consultants / head hunters, employee referrals, etc.
– Internal Costs: Cost incurred in salaries, facilities costs, travel, relocation expenses, etc
A recruiter can have a limited control on internal costs; however he can develop strategies in order to limit the external costs (direct recruitment advertising, job boards & head hunting). Below in the article, I lay down some important steps which a recruiter can implement in order to cut down the Cost per Hire.
1. Reach out to Active & Passive candidates on Facebook
Using Facebook gives you a huge value for every rupee you spend. With an ever growing user base on Facebook, you can contact a large number of people in a very cost effective way. Facebook has highly active users whose network consists of similar candidates and an easily contactable user base. A Facebook career page with dedicated career tab can allow your job postings to reach directly to your fans in turn saving you money.
2. Build your network
A recruiter with a few good connections doesn’t need hundreds of leads. Instead, only a handful of actual advocates can get his word out in a way that’s more authentic and infinitely more powerful than blasting out an automated e-mail to your entire candidate database. The idea for networking is to add value and build roots in order to reap benefits later. One can use Facebook search to find profiles ideally suited for openings in your company and connect to them. Networking incurs almost no cost but provides benefits much higher than buying resumes from job portals.
3. Engage your talent pool
Recruiters should not rely completely on the content team to develop content for them. Develop & publish content which should engage your connections. One can always use information about vacancies and open positions which can garner interest among your connections who may be seeking similar opportunities. You can also share relevant content posted by others in order to maintain interest of your audience and keep your page loaded with updated content. Engaging also helps recruiters connect with passive candidates and utilize them to fulfill future openings. Remember, communicating with talent that is already engaged is much easier than reaching out to new profiles. Sharing engaged talent who is already familiar with your organization increases the probability of getting a successful hire.
4. Use Facebook Advertising
The cost of placing Facebook advertising is much lower than traditional methods of recruiting. You can tailor your job adverts to exact audience and also update and adapt advertising campaigns whenever you need to. Also Facebook advertising gives you an exact measurement of your efforts in the form of measures like CPC, cost spent, reach etc. This data helps recruiters to keep a track on how their ads are performing and what changes it needs to make it better. Facebook advertising enable recruiters to target right candidates for their job openings which in turn result in 1/3rd of the resumes sourced as compared to source from other channels, to guarantee a hire.
For ex. For our client 7, 200 resumes sourced from job portals resulted in 1 hire whereas 70 resumes sourced from Facebook resulted in 1 hire. (Source: MyParichay client report Q1 2014)
5. Use referrals
Employees can always help a recruiter with prospective candidates for an immediate requirement. Referring employees in your organization are always among top sources of hiring volume and new hire quality. Referrals guarantee quality hire that is already aware of your organization and are somewhere associated with your brand. You need not spend piles of money in a referral program; instead you can try connecting with your organization’s peers and ask for referrals thereby saving a large amount of cost.
Reducing the cost-per-hire is an on-going process for HR departments and involves thoughtful planning and execution. Numerous platforms are available at present with features which enable you to source, connect, recruit and engage with talent available. HR pros can utilize these platforms and cut costs incurred in hiring.
MyParichay is an award winning, Facebook based SaaS hiring platform that combines job boards, social media platforms and mobile technology to deliver a significantly better solution for recruiters, employers & individuals by:
1. Utilizing the “whole web ” to source active and passive candidates
2. Make every individual a “distributor” of jobs.
3. Make every individual source of Quality talent by unlocking access to their network
MyParichay currently serves 25 customers, since its product launch a year ago, including American Express, HCL , EY, IBM, Aviva, Infosys BPO, Genpact, EXL, 24X7 BPO, HDFC Bank, ICICI Prudential.
With its tremendous growth, MyParichay is demonstrating the appetite of employers to tap into the + 870 million talent pool active on Facebook and typically not accessible thru LinkedIn or job boards.
Take a test drive of MyParichay solutions at