Counting The True Cost Of Recruitment

Counting The True Cost Of Recruitment


By: Ed Dalton

csm ht hr header 06b1eeeb5c - Counting The True Cost Of Recruitment


Irrespective of which side of the fence one sits, I’d argue these are interesting & exciting political & economic times we live in, if a little unsettling and uncharted.

While businesses come to terms with, and adjust to, the new Brexit & Trump era and the analysts try to predict what it means for the economy, companies still need to look to the future in the talent they secure today – it’s future leaders who will safely steer their ship through the current conditions but be prepared & skilled to excel in what lies beyond the horizon.

Companies understandably look for savings and efficiencies in how they operate but if a business is serious about having the competitive advantage in its market and the agility to adapt to an un-predictable economic landscape then it should want to ensure that its hiring strategy promotes securing the very best people it can to achieve this.

It is a hugely competitive market to secure that talent from, the minefields are endless and the strategy a business embraces now will have a significant impact on its future performance and success.

Challenges Of Recruitment

There are many resourcing strategies out there to find this talent and everyone has different views on what the priorities are. Cost is invariably a common theme and if a business unit is mandated to drive its costs down then an obvious measure to focus on is the annual recruitment spend. It’s a clearly quantifiable figure but irrespective of whether the cost saving comes from direct sourcing, outsourcing to an RPO or driving down the % fees its suppliers can charge, if a business encourages the wrong recruitment behaviours it will only achieve one thing: a decrease in quality of hire over time and it will find itself securing talent from the “best of the bunch” rather than the “cream of the crop” that their competitors may well be gaining a competitive advantage from.

If commercial terms and SLAs are to genuinely represent a business’ best interests, they must take into account the thoroughness of the search, the level of screening undertaken, the priority which it is given. They should promote quality, not encourage mediocrity.

A poor hire will result in a vacancy further down the line and the recruitment process has to start all over again. Whether the candidate is asked to leave, or chooses to go of their own volition, the hidden costs of recruitment are immediately doubled.

A mediocre hire will stifle performance rather than drive it. They may stay for years but achieve far less than another more experienced candidate who wasn’t unearthed because the strategy didn’t encourage it.

It’s the butterfly effect in action and is a very subjective, unquantifiable future cost but I wonder to what extent it is taken into account.

Getting Value From Your Recruitment Agency

To maximise the value gained from an agency recruitment partner, a business needs to measure the commitment they can offer, the integrity of their approach, the trust they can build into the relationship. What lengths will they go to find the very best person for a role? What priority will they give you? How well do they know your market, your business and your culture? How broad are their networks and how deep are their relationships? Are you getting access to the best talent and candidates with the best fit for your roles?

The true cost of recruitment to a business is too complex to calculate than simply looking at the bottom line but I’d argue there will be a direct correlation between the commercial terms and strategy set for recruitment and the capability and long term performance of the individuals hired and the business as a whole.

Get the balance right, build the right relationships and encourage quality, secure your talent from the cream and the future landscape will look little more predictable.

To discuss in more detail how you can attract top HR talent to your business, please contact me by calling 01252 718777 or emailing

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