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How to Hire Top Talent on a Shoestring Budget
An organization with a large hiring budget can offer a candidate higher salaries, expensive benefits with stability. But what about the companies who can’t afford recruitment on a large scale with large budgets? It can be difficult to hire top talent.
Small companies, especially startups, struggle to meet their staffing requirements in a way that is affordable for them. To make up for the cost, companies must explore some creative options to find talented employees that won’t cost much.
Let’s start by understanding the Cost per hire. To calculate your per hire, apply the following formula:
Cost Per Hire = (Internal Hiring Cost + External Cost / Total Hires)
If you want to compare the cost per hire, here are some numbers for reference
Avg Cost per hire in India – $350
Avg Cost per hire in US/Europe – $3000
Avg Cost per hire in the Asia Pacific – $800
How to Hire Top Talent on a Shoestring Budget
Here are some ways which can be applied in the traditional recruitment processes:
#1 Instead of recruitment agencies reach out to internal employees for referrals
Current employees can be asked to name 3 people “Who can be the best person for this job”. Not only this can help in saving money and time, but according to studies it also improves the quality of hire, reduces turnover rate, and increases the offer acceptance rate.
You can reach out to former employees too since they understand the job and the company, they can be helpful in identifying qualified candidates.
Savings Calculator: Recruitment Agencies typically charge one month to two month’s worth of salary as a fee for finding the right talent. So Assume a job comes with a $1000/month salary. By incentivizing your employee referral, you stand to save $1000-2000.
#2 Improve your web presence to attract top talent
In this age of digitalization, the internet can be helpful in increasing your organization’s reach to a wider audience.
With the help of your company’s website and social media, the job seekers can have access to information about your company and its culture before even applying. Top talent will be more readily available.
Here’s a company culture stat to consider: 90% of professionals conduct research on a company’s culture over the internet before accepting a job role. You can create an employer brand by sharing anecdotes, praising valued employees, and communicating the values that are important to your organization.
To make this process cost-effective try replacing it with social Media & free job boards instead of paid ones.
Savings Calculator: On an average, LinkedIn charges roughly $825 per month for a recruiter license and $120 for recruiter lite. A solid social media presence can help you save between $3000-9000 a year on such license fees.
#3 Hire Remotely
Cost of travel, hotel accommodation, etc. is a factor that can stop you from screening a higher number of candidates if your company is struggling with a tight budget. As the Covid-19 outbreak has exposed us to a lost more technical options for every procedure, recruitment procedures too must keep up.
Remote hiring can be your option here, by taking online assessments and interviews from remote locations can be convenient for both the recruiter and recruit. With reduced travel hassle and cost for the applicant, this could be more attractive for an employee and reduce the salary costs.
Instead of hiring from one specific location, remote hiring can help you in finding candidates from diverse backgrounds by also reducing the cost per hire.
#4 Use ATS for top talent
Searching for the right recruits can be messy and time-consuming, but applying the emerging technologies available can help to streamline the process.
Artificial intelligence in recruitment can help in the automation of much of the process. It can analyze the enormous volumes of data to sort through the applications, resumes, or CVs and identify those who are best suited to the job.
These softwares can also help to improve the language which you use in your recruiting materials and tailor your approach to the particular set of candidates you’re looking for.
They can also help you save hours each day that would have been devoted to just reading and sorting through hundreds of applications. This time can be better used on other priorities like sitting down with the candidates themselves in an interview.
Organizations that currently are not investing big data in their hiring process may find themselves at a major disadvantage, therefore stay ahead of the curve by using every tool in your budget.
Tip: Don’t buy expensive recruitment software before you have a strong hiring process in place. Instead, opt for a free Applicant Tracker to manage the process.
#5 Move to online pre-employment testing software
These assessments help in speeding up the process and assessing candidate’s skills and quicker filtering unsuitable candidate’s skills than any hiring manager. And saving every second here saves money.
By making the pre-employment assessments online, the candidates can take them remotely, the time is saved and money in traveling too. This in return helps in increasing the company’s employer brand.
By validating skills through these assessments, it becomes efficient to find the candidates with the required set of skills and abilities.
Pro-Tip: If you as a recruiter and want to conduct an efficient and customizable pre-hiring assessment, you can look at Xobin for candidate evaluation.
#6 Use video interviews for screening top talent
In the traditional process, at times you may need to filter hundreds of CVs to end up with a group of eligible candidates. And with the lockdowns still not being completely ended, interviewing in the office can be more complicated and expensive than earlier, because of the social distancing restrictions that can increase candidate stress.
Video call interviews are a cheaper way of doing the work and a lot of these apps are free, for example, Skype, or Zoom in their primary versions. As a lot of people’s time is involved in the review process, and think whether this can be cut down, or combined with other similar tasks. This can help you hire top talent.
#7 Offer cost-effective benefits
One of the most important things a candidate, especially millennials and Gen-Z, looks for in an organization is the employee compensation and benefits they provide. According to a survey report by Willis Tower Watson, 78% of employees are more likely to stay with an employer because of their benefits program.
You can provide simple-budget-friendly perks like flexible scheduling, food, gym memberships, reward cards that will help you attract and retain top employees.
#8 Hire according to requirements
Hiring freelancers, part-time or non-traditional employees like people looking to re-enter the workforce, older employees, or employees who are outside of your industry are more likely to be less expensive.
Freelance or part-time employees are often more affordable to hire because hiring them doesn’t involve expenses like worker’s compensation insurance or full health benefits. And in the case of non-traditional employees, since they are often overlooked, there is a chance that their salary expectations will be more within your budget.
Hiring on a Budget
Hiring and onboarding new employees are generally considered time-consuming and expensive. However, implementation of some of the above steps could easily save your business $2500-$3000 per month.
Amrit Acharya is the head of products at Xobin – an online assessment tool used by 600+ companies for bias-free recruitment. An avid tennis fan, Amrit writes about recruitment optimization, hiring strategies, and product management.