If you pay peanuts, you’re going to get monkeys, goes a famous quotation normally trotted out for salaries. It applies to recruitment too, which is after all a part of ‘paying’ for an employee. But is it really true? Why are there so many cheap recruitment options on the market if they don’t work? Looking at the Advantages and Disadvantages of Cheap Recruitment is the place to start.
Cheap Recruitment in 2016 tends to encompass a range of options: from generalist recruitment agencies offering a low fixed fee option, to internet job boards, and – to some degree – social media utilisation.
Cost-Benefits & Advantages of Cheap Recruitment
- Glaringly obvious is the amount you pay. Your upfront cost when you go for a fixed price cheap recruitment option is going to be known and minimal. You know where you stand.
- If you have a limited budget then you can work within it whilst still working on filling the job.
- If the recruitment doesn’t work well, in the end you haven’t lost a huge amount. You’ve only lost a limited amount on starting the process again.
- You stand to get a position filled quickly and cheaply without much intervention from you – if it goes well
And that’s where the problems start. Cheap Recruitment is a gamble. There are no guarantees and no comebacks. Look at it this way: a fixed price recruitment solution of £199 that in reality only has a fill rate of 20% is not as cost-effective as a fixed price recruitment solution of £499 that fills over 75% and has a high-retention rate.
The Disadvantages of Cheap Recruitment
Bargains often look good until you look closer. It’s the same with Recruitment. Given that the actual recruitment outlay on hiring a new employee is only one part of a wider cost including induction, training, loss of output during the process, it’s important to consider whether this is really the place to scrimp and save. Given that, even two years ago, the costs of recruiting a new member of staff were averaged at over £30k it seems a dangerous place to make the cut. Cut resources at the first stage of the hiring process and the costs stand to mount up even higher in the long term.
The question to ask is: Are you really getting a good deal? At the end of the day no one works for nothing, so there’s an element of you get what you pay for. Whilst certain Recruitment Processes, like Net Recruit’s, have become highly streamlined and efficient to ensure the lowest cost to the employer, there is only so little a recruitment strategy can cost before it’s uneconomical. Corners will be cut and you won’t see a whole lot for your pound.
In reality, this translates to things like you doing the legwork. With cheap recruitment you’re going to be chasing, filtering, sorting and processing candidates. A cheap recruitment option in many cases becomes nothing more than an expensive middle man with you and the candidates in reality doing 99% of the work. Given you currently have a staff void to fill and a job of your own to do, this can be tough ground.
What it’s Worth Paying For in Recruitment
Whilst protecting and working within your business’s recruitment budget is essential, there are ways to do this that ensure you get the best bang for your buck, and the best use of your time. It is absolutely worth paying for:
- Expert knowledge of your market: the chances are that a recruiter with a specialist niche is going to know the market and candidate base inside out. It’s what they do, day in day out. They have their finger on the pulse and have the insight into the market with a fine-tuned understanding of salaries and career expectations. You benefit from their knowledge.
- Extended Reach: getting your recruitment search further afield to the very best candidates takes time and dedication along with knowing where to look. A talented recruiter will be capable of finding and accessing both passive and selective candidates meaning you really do get the cream of the crop.
- Employer Branding: Knowing that someone is ‘selling’ your company for you whilst you get on with running your business, and doing it as your advocate, can pay not just in this recruitment process but in the next one too.
- Getting Employees Who Stay: Richard Branson is famous not only for his highly successful business acumen, but also for his pioneering approach to staff retention. He says: “Train people well enough so they can leave, treat them well enough so they don’t want to.”. This is an incredibly important point to consider right from the recruitment stage. If you invest in the recruitment process and get a brilliant candidate then invest in them, treat them well, then your recruitment costs not only will be offset against their ultimate input, but you’ll be spending less on recruitment in the long run by getting the right person, first time, every time.
How Can I Drive Down Recruitment Costs Then?
Working with a tight budget in the current market can be a tall order, but there are areas within your control:
- Be clear on what you want and your expectations. It’s worth putting in a little homework at the start to feed a recruiter the best possible brief. It will pay off in time and resources.
- Invest in the recruitment process in terms of both time and money so that you get the right candidate and reduce the indirect costs of recruitment (e.g. a new hire leaving on the last day of training).
Utilising a cost-efficient recruitment strategy that isn’t simply an expensive way of posting on a job board, means that you can avoid duplication and costs. Recruitment can be expensive, but the costs must never be looked at in isolation with focus only on the initial outlay: it’s misleading. And be wary of Cheap Recruitment, unless you want very expensive peanuts for your monkeys.