Hiring skilled talent can be a daunting task for any business. Finding the right people can quickly become overwhelming from the expenses involved to the time it takes. Today, we’re breaking down the true cost of recruiting talent and exploring why choosing the right recruitment strategy is crucial for your company’s success.
Rather watch than read? Check out the YouTube video below to learn more about the true cost of recruiting talent and how it impacts your business.
Option 1: Building an Internal Recruiting Team
At first glance, building an internal recruiting team might seem like the perfect solution. After all, who better to understand your company’s culture and hiring needs than your own employees? But the reality is far more complex—and expensive.
- Recruiter Salaries: To attract a good recruiter, you’re looking at a salary range of $75k to $90k per year. If you want someone with more experience, you might need to budget over $90k.
- Tools and Technology: A recruiter needs the right tools to do their job effectively. An Applicant Tracking System (ATS) can cost between $3k and $15k per year. Add in tools like LinkedIn Recruiter and job board subscriptions, and you’re spending another $6k to $24k+ annually.
- Additional Staff and Overheads: As your company grows, so will your recruiting needs. Hiring a Recruiting Coordinator or Sourcer can add another $50k to $60k per year. Plus, there are additional costs for training, management, benefits, bonuses, office space, and equipment—easily adding another $20k to $35k.
When you add up all these costs, building an internal recruiting team can quickly reach $160k to $216k or more annually! And this doesn’t even account for the time and resources required to manage the team, onboard new hires, or deal with the risks of bad hires and turnover.
Option 2: Hiring a Headhunter
If building an internal team sounds too costly or resource-intensive, you might consider hiring a traditional headhunter. This can seem like an easier option, but it has its own set of drawbacks.
- Headhunter Fees: Headhunters typically charge 20% to 30% of the first year’s salary for each hire. For a $100k position, that’s $20k to $30k just for one hire! These fees add up quickly if you need to hire multiple people.
- Incentives Misaligned with Your Goals: Headhunters earn a commission based on the candidate’s first-year salary, incentivizing them to push for higher salaries. This can mean shopping candidates to the highest bidder, increasing costs for employers like you, and potentially compromising on the best long-term fit for your team.
- Focus on Speed Over Quality: Headhunters are often incentivized to fill roles quickly and move on to the next assignment. This can mean the candidates they find may not always be the best fit for your team, compromising on quality. Plus, they don’t have the same understanding of your company’s culture and values, which can lead to a less personalized candidate experience.
- Risk of Higher Attrition: Hiring candidates who aren’t a long-term fit can lead to higher turnover rates. When new hires leave sooner than expected, you face the added costs and hassle of backfilling positions, which also disrupts team dynamics and productivity.
While hiring a headhunter might save you time, it doesn’t necessarily save you money or guarantee the best hires. You might end up spending more on recruitment fees without achieving the long-term fit and quality you need.
Option 3: Using Your Existing Team
Another common approach is to have someone already on your team handle the recruiting tasks. This might seem like a cost-effective solution, but it can be more of a short-term fix than a sustainable strategy.
- Distraction from Core Responsibilities: Asking your existing team members to take on recruiting duties pulls them away from their primary responsibilities, which can impact their productivity and overall job satisfaction. Even worse, this could lead to burnout and potentially cause them to leave the organization (believe us, we’ve seen it!).
- Lack of Expertise: Without a solid background in recruiting, your team might not be equipped to find the best candidates, leading to potential mismatches and higher turnover rates. This could ultimately cost your company more in the long run due to less desirable hires and the need to repeatedly fill positions. Read more in our related blog The True Cost of Turnover.
While it might save money initially, using your existing team for recruiting often leads to lower productivity and a higher risk of hiring mistakes without trained recruiting expertise, making it an unsustainable approach in the long run.
Introducing Hoops: A Smarter, Cost-Effective Solution
So, is there a better way to recruit talent without breaking the bank or stretching your team too thin? Absolutely! At Hoops, we offer a smarter, more cost-effective recruiting solution that combines top recruiting talent with advanced AI and automation technology.
- Expert Team: We provide you with an experienced recruiter backed by a full sourcing and operations team, so you don’t have to worry about managing an internal team or paying high headhunter fees.
- Advanced Technology: Our AI-driven, streamlined recruiting process with programmatic advertising ensures your job ads reach the right candidates efficiently, maximizing every dollar of your investment.
- Cost-Effective: With Hoops, you get the best of both worlds—cutting-edge technology and expert management—at a fraction of the cost of internal teams or headhunters.
With Hoops, you don’t have to choose between cost and quality. We handle all the complexities of recruiting for you, so you can focus on growing your business. Ready to make your hiring process the easiest and most effective it’s ever been? Contact us today for a free consultation!
Simplify hiring. Amplify growth. Visit us at hoopshr.com or call 877-262-7358 to learn more!
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