Is your company hiring? Great! That’ll be at least four thousand dollars coming out of your not-so-petty cash. Each.
That’s not an exaggeration. According to SHRM data, the average cost-per-hire is $4,129. Well then, your business will just hire talent straight out of college to save money. Actually, that will cost you even more: $6,110 per hire when recruiting early-career interns and employees out of college.
This is because hiring is expensive. Not the tools per se, but the time it takes to hire qualified employees. On average, it takes 42 full days to fill a position, according to SHRM. Additionally, universities charge companies to gain access to their students. In that context, you can easily see why it can cost your business between $4,000 and $6,000 to fill a position.
Ready for even more bad news? According to the US Bureau of Labor Statistics, the median years of tenure for young adults out of college is generally less than one year. Meaning all that money you just spent to fill that entry-level position? Get ready to pay it all over again.
So how can your business buck the trend and save thousands on your recruiting? Let’s look at 5 ways your business can decrease your cost-per-hire.
1. Create a Talent Pipeline with Internships & Mentorships
One of the main costs of recruiting is that without planning, it’s a scattershot endeavor. Most companies simply cast a wide net on various job boards, or resort to sending campus recruiters out to various career fairs and college campuses. Especially to find young talent, this approach usually sees a lower success rate and ultimately costs businesses upwards of that $6,000 mentioned earlier.
Instead, your recruiting will see higher ROI when you invest in a talent pipeline. While companies can create and maintain a pool of qualified candidates for any stage in their tenure, for early career employees, internships are hands-down one of the most effective ways to build a talent pipeline of young talent.
Interns can be molded into your company’s ideal hires by providing them the insight into your culture as well as the specific tools & skills needed to succeed at your business. It’s also a great way to build loyalty to your brand, mitigating the high turnover rates we see with younger employees.
Mentorships are another great way to create a talent pipeline for specialized roles. While interns can often be generalists, helping out in multiple capacities, mentorships provide focused, individual training to help them grow into a specific role at the company.
2. Publish a Skills Checklist, Create a Certificate Program
When hiring early career talent, you may not be able to tell much from their degree. Sure they majored in Marketing. But do they know how to use your specific email automation software? Sure they took courses in video editing. But did they spend most of their time in Avid, or spent a little time in Avid, Premiere, Final Cut, and really mastered none of them?
Instead of guessing, be proactive and help job seekers self-filter by laying out exactly the tools & skills required for this position. In fact, showing a mastery of certain skills may outweigh having a four-year college degree completely. As we wrote about previously, many Gen-Z candidates (especially diverse ones coming from disadvantaged backgrounds) may be skipping traditional education to take bootcamps and learn online.
To that end, your business can consider creating your own certification program. Like Google’s online training programs, you can publish a checklist of programs and bootcamps candidates can complete to be considered for a position. Of course, your brand might need the clout of a Google to ask candidates to complete coursework, but if you affirm that the courses can take the place of a college degree, it could prove to be very enticing.
All this can create an ideal candidate that literally checks all the boxes, which will save money not just in avoiding college recruiting, but saves money by greatly reducing turnover.
Speaking of which…
3. Reduce Onboarding Churn
While the tenure data from the US Bureau of Labor Statistics painted a dire picture for early-career turnover rate, never fear: other data paints an even worse picture! According to BambooHR, 31% of workers have left a job within the first six months. And of those, 68% left within three months!
Those numbers tell us that for nearly a third of workers, there’s a fit problem when they first get hired. And a turnover rate that high can cost your business many times more than we previously cited. In fact, according to PathMatch research, the cost of a bad hire can cost you $15,000 due to high churn and the additional time & resources that go into replacing that bad hire.
Much of the time, high employee churn can be attributed to bad onboarding. So to tackle your high cost-per-hire, your company should give special attention to the new employee onboarding process. While this can be an entire topic of an ebook in of itself, businesses can generally improve their onboarding by focusing much more on orienting new hires to the company culture. Surveys show that more than paperwork or rules or regulations, helping new employees understand the culture is the true key to better onboarding.
4. Leverage 1-Way Video Interviews
Keep in mind, most of the expense of hiring is the time it takes up for your hiring personnel. Anything you can do to shrink time-to-hire will drastically reduce costs. Today, much of the hiring funnel can be simplified and made faster with technology. One of our favorite ways is to use video interviews, but not in the way you think.
We all are used to video interviews, but that still takes scheduled time for your hiring manager. Instead, switch the first round into a 1-way video interview/submission. Provide questions that candidates should answer on video which they can film and upload at their leisure. This can make it easier on the candidates because there is no set interview time, and they can do as many takes as they want.
For your hiring manager, she saves time by being able to review these interviews in bulk. If each is five minutes long, she can screen 12 candidates in an hour. This can cut days, even weeks, off your time-to-hire; and thus helping you decrease your cost-per-hire by a good amount.
Is it less personal? Depends who you ask. Tech-savvy Gen Zers are comfortable in front of the camera and enjoy making introductory profile videos on PathMatch to showcase their personality for potential employers. 1-way interviews may be strange for older hiring managers, but not so much to early-career hires.
5. Use PathMatch to Access a Giant Pool of Talent
At the end of the day, getting in front of the right candidates who are actively looking to be hired, is the more efficient way to fill your open positions. And to lower costs, your business needs better targeting to only show up to certain candidates.
Well if posting to job boards is a scattershot approach, using PathMatch is a laser.
Tens of thousands of students are creating detailed profiles on PathMatch explicitly stating the types of internships & jobs and companies they are looking for. They list skills, as well as specific software that they are familiar with, and upload profile videos for employers to use as an additional screening step.
Once your company creates a job listing in PathMatch, candidates that match your requirements will immediately receive a push notification of your posting. This provides immediate connections to highly qualified grads without any of the hassle of on-campus recruiting or sifting through hundreds of resumes.
Interested in connecting with PathMatch’s pool of early-career workers? Contact us for a free demo of our app today.