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Recruiting automation is more than just the latest buzzword. This new category describes how cutting-edge organizations are using the latest technology to identify, qualify and engage the highest quality talent. As the labor market is extremely competitive and recruiting teams are spread thin, there’s barely time in the day to connect with a candidate, let alone explore new technology. But passing over the latest trend in favor of spending more time sourcing will hurt more than help in the long run -- as smaller recruiting teams look for ways to keep up with organizations that have larger budgets, the solution is to work smarter, not harder, by adopting recruiting automation technology.
Before diving into the ways recruiters can reduce their companies’ cost-per-hire, it is critical for recruiting leaders to know their average cost-per-hire. The nature of each role will accrue variant costs, but overall to calculate impact, recruiting teams must first take a bird’s eye view of what their companies spend to get an employee in the door. To calculate cost-per-hire, use this formula:
∑(External Costs) + (Internal Cost)
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Total number of hires in a time period
The external and internal recruiting costs can be comprised of any of the following expenses:
• Job sourcing
• Recruiting tools
• Contractors
• Job Boards
• In-house recruiting staff
• Referral rewards
With a full understanding of their company's cost-per-hire, recruiting leaders are now in the best position to reduce that number. Here are a few ways recruiting automation tools can assist with lowering cost-per-hire.
1. Productivity savings
One of the best ways to treat a high cost-per-hire is to do more with less. Increasing the productivity of the resources you already have may keep your external and internal costs stagnant, but increase the total number of hires in a time period. This is a great solution for teams that have extremely lofty goals and less budget to get them there. In fact, companies can expect to achieve an increase in staff productivity between 10 and 50 percent by instituting recruiting automation technologies.
2. Faster time-to-hire
The average time-to-hire in the U.S. is 42 days, but companies that invest in recruiting automation technology reduce their time-to-hire by 4.5 days per role on average. When you multiply the average cost per day of an unfilled position, $500, by the number of reqs per recruiter per year, 40, this savings reaches $90,000 per recruiter per year. Time really is money when it comes to recruiting so any way you can save time, you’re also saving money. Recruiting automation is a great way to save time because it gets the tedious, time consuming tasks like manual sourcing, initial outreach, and crafting the perfect email out of the way. This allows recruiters to spend their time building strategic relationships, engaging with candidates and bringing quality talent into their organizations.
3. Increase candidate quality and scale
Recruiting automation helps recruiters continuously identify and engage the best talent more easily than ever. On average, recruiters spend nearly one-third of their work week, about 13 hours, sourcing for a single role. Using recruiting automation, recruiters can save time digging through dozens of open tabs to determine which candidates are qualified for their open roles. Because higher quality talent is easier to find, recruiters will be able to increase the number of high quality candidates in their pipeline. Not only will organizations save time and money, but they’ll also be able to scale their recruiting efforts without draining resources.
AI and automation could be the missing piece to executing large scale recruiting strategies on smaller scale budgets. However, it should be noted that a critical component to successfully using recruiting automation technologies is a great recruiting team. Recruiting automation tools do not replace highly skilled and seasoned recruiters, in fact when recruiters augment their workflow using AI, the results are higher quality hires, in less time, using less budget. To learn more about decreasing cost-per-hire using recruiting automation, subscribe to the Entelo blog for more on recruiting automation every week.