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6 Ways To Improve Your Recruitment Function – Part 6 of 6

6. Reduce your recruitment related spend
The final method we want to discuss in this series is to look at ways you can reduce your costs through the recruitment process and your overall spend. We are going to use a few cost comparisons to get you thinking about this. If engaging a recruitment agency, they will generally charge you a percentage placement fee of the selected candidates annual salary. This fee can generally be in the vicinity of between 10 – 25%. So lets just use 15% as an example. If the average package you offered a new hire was $100,000 and the fee was 15% then each time you hire you would be looking at paying around $15,000 per hire. If you are hiring multiple people through the year you can see how this cost can quickly add up.

Now let’s look at an example where you hire an internal recruiter to assist you with this process. We just want to point out these numbers are industry averages and can vary from organisation to organisation. These figures are also in line with someone who is purely responsible for recruitment only. You might have someone in your business that balances both recruitment, HR or administration and thus their figures might change accordingly.

Let’s say you pay them a base salary of $80,000 per year. You then need to take into consideration all employee on costs such as superannuation, work cover, insurances, payroll tax and the cost of their office and technology expenses such as mobile, laptop etc. Additionally, if you do invest the money to employ someone internally in your organisation it is recommended to also invest in the technology such as an e-recruitment system, digital database and interviewing technology in order to give them the best chance to succeed. Within the table below you can see that these costs are getting up to around the $125,000 range for a 12-month period. This is also not taking into consideration a peak recruitment period where they still may need to go externally.

A method you could use to reduce your recruitment spend is to consider outsourcing all or parts of your process using an hourly rate model. Hourly rates and costs will vary depending on the company you go to and the maturity of their process, technology and staff. So I am just going to provide you industry averages to give you an indication of what this could look like.
If you choose to outsource your whole end to end recruitment process to an external provider on hourly rates they will need around 30 hours to complete the process. Which would cost around the $5000 mark. This is a lot more affordable than the % fee model.

When you engage a supplier on hourly rates or per project you have more flexibility and can choose the parts of the process you want to outsource. For example, if you choose to outsource only the advertisement writing, resume assessments, interviews and shortlisting you are looking at more like 10 -15 hours of recruitment support which would bring the cost down to around $2000 – $2750 which is significantly more affordable and cost effective for your organisation.
If you wish to get a clear gauge of how much it will cost your business to outsource all or some of your recruitment don’t hesitate to reach out to us and we can walk you through our hourly rates and associated service levels.

Additionally, it is worth noting that if you are hiring more than one person with the same skill set then outsourcing all or parts of the process on hourly rates will be very cost effective. With this model you are paying for the process and the expertise, so you have the ability to hire as many people as you want during the process and you would only need to pay for any additional service you need. If you have not considered engaging an external partner on hourly rate or per project basis, I would highly recommend you considering this as part of your recruitment strategy.

To organise a conversation with a Harrison McMillan Director to discuss how our cost effective pricing model could help you to identify and hire the right people, then click to book a conversation.

To summarise, the 6 key ways you could improve your recruitment process in order to be able to identify and hire top talent, cost effectively in your business are;

6 ways to improve your recruitment function

1. Outsource all or parts of your recruitment function. Choosing the parts of the process you want to keep in house and outsourcing the parts you would like assistance with.
2. Only speak to qualified candidates to ensure you are not wasting time on interviewing candidates who are not a great match for you.
3. Attract top talent, make sure you are using all the attraction tools available to you or partner with a provider who can support you in this area.
4. Use technology to create efficiencies in your recruitment process, such as implementing an e-recruitment system or using pre-recorded video interviewing.
5. Spend more time shortlisting and interviewing ensuring you are incorporating many candidate assessment techniques throughout your process.
6. Seek ways to reduce your recruitment spend and examine which of the three models is going to provide you the best value for money.

We would just like to take a moment to explain why we wrote this series. Firstly, we are truly passionate about all organisations, no matter your size and budget, having the ability to gain access to the best recruitment expertise, processes and technologies to enable you to identify and hire the right people to help your business succeed. Plus, we know you might want our help in transforming your recruitment function. If so we are keen to have a conversation to discuss it and see if Harrison McMillan affordable yet effective recruitment solution is a good fit for you and what you are trying to achieve in your organisation.

To organise a conversation with a Harrison McMillan Director to discuss how our cost effective pricing model could help you to identify and hire the right people, then click to book a conversation.

About the Authors

Dani Cuff and Jodi Walton are the Co-Directors of Harrison McMillan, an affordable yet effective outsourced recruitment solution. Together they possess almost 30 years of Recruitment and Human Resources experience where they have operated within local, national and overseas markets for various organisations including Government, multi-nationals, niche providers, SME’s and start-ups. They reached the point in their careers where they wanted to change the way things were done within the recruitment industry and this is why they started Harrison McMillan.

Harrison McMillan are a team of dedicated and highly experienced recruitment professionals who are here to help you with your recruitment support needs. We know you need to be free to get on with what you do best. That’s why we have created an affordable yet effective outsourced recruitment solution, where we behave as your internal recruitment team to identify and hire the right people for your business.

To find out more about Harrison McMillan visit: