The hidden cost of recruiting; more than £26,000 per hire
“It’s not the cost of advertising or paying a recruitment fee to get someone in the business, it’s all of the things that we are not tracking that start to really hit the bottom line,” Teresa Mitrovic, Professional Performance Consultant, TM&Co said at last week’s HR Game Changer Conference. “But we don’t see it because it’s not a cost that we have to start paying immediately,” “It costs, on average, £32,000 to recruit a new team member, and 82% of that cost is hidden cost,” she said at the event held by myHRcareers.
Mitrovic stated that businesses that have sustainable engagement have 44% higher retention rates and are 30% more profitable and 50% more productive. She blamed a lack of employee engagement for making businesses less sustainable, encouraging companies to “think in terms of sustainability of employees’ careers”. “We’ve got younger generations coming into the market as well, that are less resilient than hardened corporate professionals,” she added. “Meaning we need to protect the knowledge that businesses have.”
It’s great to see this sort of research gaining ground and debate. Where costs arise most is the productivity lag experienced by team and line manager through time spent interviewing and on-boarding new hires. Ideally businesses should have a handle on the visible AND hidden costs of recruitment, I’d add absenteeism and in a perfect world presenteeism to that list too. The reality is that not all businesses do. Yet.
The unfortunate thing is that there are businesses out there measuring all sorts of good stuff – like engagement – while overlooking a mountain of untapped information about absence and leavers that has the potential to reshape both their cultures and their performance. On the upside, as long as they refrain from measurement, those of you who are tracking it have the upper hand.
A true Employer Brand is probably the most important subject right now, royall feel that the really clever companies are spending as much on Employer Branding as they are themselves. A true brand is not a strategy. It’s not an award-winning ad or ground-breaking new product. A true brand lives and breathes in people – the ideas they have, the beliefs they share and the service they deliver. That is where we really differ as a recruitment business as we help brands prosper by mobilising their existing team behind their goals and values and introducing new talent to adopt the same. Engaging minds is not enough. The value in good communication lies in changing behaviours. So, we measure the effectiveness of all our work by the action it inspires. There’s more power in a movement than a school of thought.
Candidates are so switched on these days and really care about a client’s vision, mission, ambition, values, behaviours etc.