Did you know that inefficient recruiting practices can cost your business a significant amount of money? From lost productivity to high turnover rates, the impact can be substantial.

To minimize bad hires, many companies have adopted extensive hiring processes. Today, hiring decisions often involve multiple rounds of interviews, along with lengthy background checks and internal reviews. 

Consider a scenario where a growing tech company is struggling to hire skilled engineers to meet the increasing demand for its products. The CEO knows that hiring new talent is essential to keep up with the competition and sustain growth. However, the hiring process is slow and cumbersome, and the company is losing out on business opportunities while existing employees are burnt out and overworked.

With high numbers of jobs remaining unfilled, one must question: Does a cautious recruiting approach justify the financial losses from vacant positions?

Why is Hiring Today So Slow?

Despite the best efforts of employers, the average time-to-hire has increased by 1 day across all industries. This pushes an already stretched recruitment process to 43 days on average.

Several factors influence the length of an organization’s recruitment process. For some, it will be a lack of applicants due to a poorly written job description; for others, it may be a lack of recruitment resources or too many unnecessary processes. 

As a business leader or HR professional, it can be easy to get caught up in the day-to-day operations of your organization. But if you’re not re-evaluating your hiring processes, you could be putting your company at risk.

In today’s landscape, the number of days it takes to hire is unsustainable if companies are to remain competitive and keep pace with the quickly changing needs of their industry. While companies may have little influence over market factors that slow down their ability to hire at speed, there are plenty of factors they can control to hire more efficiently without jeopardizing the quality of the hire. As the time to hire continues to rise, HR and talent leaders will need to innovate their strategies for finding, sourcing, and retaining talent.

The High Cost of Slow Recruitment

The direct financial expense of a slow hiring process has surged to $4,700 per employee. Yet, employers often overlook the total cost, which can escalate to 3-4 times the position’s salary. For instance, recruiting for a $60,000 role could add up to $180,000 or more.

Hiring expenses, compensation, and time – these are tangible, “hard” costs. There is one more, however, that is intangible and highly underestimated….disruption.

These “hard” costs don’t factor in the cost of leaving positioning unfilled for a significant amount of time and the disruption it has on your business. And often, that cost can be hard to quantify. 

Let’s break it down a bit. Every day you leave a position unfilled, you’re paying a cost in unmet productivity and revenue. So, let’s say your company is looking to fill a mid-level sales position, and the employee is expected to generate $150,000 in revenue each year, that’s a loss of $75,000 in potential revenue for your company.

When considering lost revenue, this is particularly detrimental in revenue-generating roles, such as sales. However, it has a bottom-line impact on all positions within an organization. It’s important to consider the role you’re trying to fill and evaluate what the financial implications might look like from all angles.

Assessing the Hidden Costs of Inefficient Recruitment

Financial costs are not the only cost of inefficient recruitment. There are several hidden costs that can significantly impact your organization’s ability to grow. Let’s start with productivity. 

It Hinders Your Productivity

Most people don’t consider the expense of losing someone on a team. The longer a position remains vacant, the more productivity is lost. Not only does this mean that existing employees have to take on additional work, but it also means that important projects may be put on hold. 

What’s more, if the person who left was a top performer, your cost could be even greater. McKinsey Research shows top performers can be 800% more productive than their peers. So now, you might need 8-9 people to achieve the same productivity level.

It Can Negatively Impact Your Employer Brand

The average corporate job opening gets about 250 applications; that’s 250 people who have had an experience with your company. You probably want that experience to be good, given nearly 85 percent of job seekers base their decision on where to apply on company reviews.

When candidates feel like they were not treated fairly or that the recruitment process was not transparent, it can lead to a negative perception of the company. This can make it more challenging to attract top talent in the future and can even lead to negative reviews of the company’s employer brand.

You Could Lose Great People

Nearly a quarter of offered candidates are lost because the employer didn’t offer fast enough and the candidate accepted an offer elsewhere. If you expect your candidates to go through long, arduous recruitment processes, you’re more likely to lose them to competitors that offer a more streamlined process. 

Furthermore, you run the risk of losing great employees as well. When a role remains unfilled, the workload doesn’t magically disappear. Instead, it’s shared amongst the existing team until the position is filled, this can result in various internal problems including burnt-out teams, negative morale, low productivity, and employee turnover.

You Lose Customers

Here’s where the rubber meets the road. When employee performance fails to meet the expectations of your valued customers or clients, the problem can eventually impact your bottom line. Not only could you be losing talent to your competitors, but you may also be losing customers to them.

The lesson to be learned? Understanding the full business impact of unfilled vacancies, in terms of both customer and employee satisfaction, is crucial.

The Key to Unlocking Faster and More Effective Recruitment

So what’s the key to unlocking faster and more effective recruitment? The candidate experience. 

The candidate experience should be at the forefront of the hiring process. Candidates who feel seen and heard as they make their way through the hiring process, even if they don’t make it all the way, are more likely to reapply in the future or have a favorable opinion of the company. 

By having a transparent process and being candidate-centric, you set the bar high for the quality of your applicants. The candidate experience ties in with the following contributing factors:

• Clearly Define Job Requirements: Make sure that you have a detailed job description that includes the skills, experience, and qualifications required for the role. This will help you to identify the right candidates and avoid wasting time on unqualified applicants. 
• Prioritize Candidate Communication: Keep in contact with applicants throughout the entire process, even if it’s just to check in and say, “Hey, no news yet!” Top candidates are likely fielding multiple offers or are at least on the radar of other organizations. If they haven’t heard from you in a while or don’t have an idea of when they can expect to hear from you, they’re not going to wait around. Stay top of mind with candidates — and at the top of their inbox — to keep them as a viable option and refrain from having to restart your search.
• Streamline Your Interview Process: The interviewing process can be a time-consuming and resource-intensive aspect of recruitment. To boost efficiency, consider using a standardized set of interview questions for each candidate and plan to have this set of standardized assessments before the start of the hiring process. This will help you compare candidates fairly and make objective hiring decisions. 
• Optimize your Onboarding and Training: Fear, confusion, frustration, and resentment are not the emotions you want to feel in your workplace. And yet those negative emotions can be weighing down new workers if they’re not properly trained or onboarded. Research conducted by Brandon Hall Group showed that strong onboarding processes improve new-hire retention by 82 percent and productivity by over 70 percent.

To enhance your recruiting efforts, make sure that you are more than just an interviewer. Be an ambassador for the company who shows others why they would want to be part of the team. Using effective recruiting strategies will help you find the right people in the shortest amount of time.

Streamlining the Hiring Process

A timely hiring process is crucial for organizations to avoid the direct and often hidden costs associated with insufficient recruitment. From lost revenue to decreased productivity and negative brand perception, the impact on your business can be severe.

The good news? There are steps you can take to streamline your hiring process and improve recruitment efficiency. Be sure to check out our blog next week where we’ll share actionable strategies to unlock faster and more effective recruitment. 

Meet with our team of tenured experts to learn how you can streamline your processes today.