Did you know that moving slowly through the recruiting process has a greater impact on your organization than you might think? When a position continues to go unfilled, potential candidates slip away as internal resources may be stretched to the limit. This ultimately costs your company money.
A National Challenge
Delays in hiring are currently a widespread problem in the U.S. In 2015, the average time to complete a new hire rose to 27 days; the highest it has been since 2001. And from the job vacancies that aren’t filled in that timeframe, 33% remained open longer than three months.
Six out of 10 U.S. companies admit to being concerned about these slow hiring trends. A shortage in highly-specified desired skills for a given position is partly to blame, but more of the credit is placed on the organization and its recruiting infrastructure – many companies today simply aren’t designed or built to hire quickly.
Think about the time your recruiting team spends entering data, managing an often-dated or legacy Applicant Tracking System (ATS), or posting and monitoring available jobs across several online properties. Can these tasks be minimized, outsourced, or automated in some way to allow your staffing professionals to actually talk to and consider viable candidates?
It’s one thing to reflect on internal process alone, but overall organizational impact is greatly magnified when you start to look at the cost in terms of dollars and cents.
Cost of Vacancy
Cost of Vacancy (COV) is a metric some organizations use to monetize the actual impact of an open position. COV can reveal how voluntary and involuntary employee turnover, and the speed and efficiency of the resulting recruiting process, actually affects a company’s bottom line.
While there are many ways to calculate COV including formulas that look at revenue per employee and salary assumptions – making it very subjective and nearly impossible to average out – the bottom line is this: unfilled jobs cost U.S. companies $13 billion per month, and $160 billion annually.
We do know the average cost to hire a new employee is about $4,000. One study estimated that COV can range from $7,000 to $12,000 per day, and in many cases much more – even as much as a six-figure total for highly specialized or senior level positions.
There are other significant ramifications, as well. An open position can slow the ability to bring a product to market, overwork current staff, disrupt team dynamics or perhaps most importantly, diminish the public perception and overall appeal of your organization to potential candidates.
Ask yourself, is a slow recruiting process really worth it? What can your company do about it?
Start by working to identify your own COV. Take the time to review the last 12 or 18 months of recruiting activity, noting number of days from post to hire, and how many of those hires remain employed at your organization.
Then set a goal to reduce your time-to-hire by at least one day per month or per quarter. Adjust your recruiting approach to not only satisfy urgent positions or needs, but to also build a “bench” or pipeline of qualified candidates that are already engaged with your company, and accessible when you need them.
If the situation is dire and you find your average time-to-hire is at 30, or even 45 days or more, consider engaging a professional services firm to bridge the gap with temporary, contract or outsourced help. As you look for a permanent hire, consider that the most talented candidates are off the job market in an average of just 10 days. A professional services firm is more likely to have access to such talent and can provide them to employers for consideration quickly.
If you’d like help evaluating or refining your own recruiting process, or if you’d like to explore the possibility of engaging a professional services firm, contact us at EFPR Solutions.
EFPR Solutions is a business consulting firm in Rochester, NY that provides staffing and outsourcing services in accounting, finance and human resources. To learn more about our experienced team of business consultants and how we can assist your organization, please call 585-486-0725, email firstname.lastname@example.org or follow us on LinkedIn and Twitter.