11 Ways to Lower Hiring Costs for Your Business
When it comes to hiring costs it’s not easy to nail down the actual figures accurately for most businesses. One of the reasons is because there are so many variables that go into determining costs. It’s also near impossible to lower hiring costs.
For example, advertising, interviewing, and training are just a few of the elements that make up the total hiring cost for an employee of any given business. According to a recent article by Forbes, a bad hiring decision could cost you as much as 30% of that employee’s first year earnings, which can add up to thousands in lost revenue.
Be that as it may, what can be done about it? Are there ways to lower hiring costs for your business?
Here are some tips to help you keep hiring costs under control and ensure you find a good fit for your open position.
1. Accurate Job Descriptions
If and when you advertise for an open position in your business, an accurate job description can increase the likelihood of you hiring the right person for the job the first time around. Knowing what the job entails can cause unsuitable candidates to forgo applying altogether.
At the same time, having a clear listing of the duties of the job can encourage qualified persons to fill out applications and provide resumes for your consideration.
2. Reduce Advertising Costs
Post job openings via an advertisement through social media or websites. Ask if colleges in the area having job boards you can update regularly with open positions. Check with your current employees to see if they know anyone who would be a good fit for the job.
These are all ways that can potentially find you a new employee without you having to spend a bundle on advertising through other more traditional means, such as newspaper advertisements.
3. Make Requirements Clear
Does your business have a Human Resources Department? Or, have you hired a recruiter to help you prescreen applicants? If either of these scenarios, or a similar one, fits your business, help them and yourself by giving clear, accurate information on the type of employee you are interested in hiring.
For instance if you are hiring for a part time position, make sure they know from the beginning. You will save both yourself and them from wasting time setting up and completing interviews with persons only interested in full time positions. Wasted time is wasted money, so be clear from the start.
4. Shorten Your Interview Window
Whenever possible, it can help you to interview several job applicants over the course of only one or two days. The advantage of shortening your interview window to a few days is that it can help you more accurately remember and compare one applicant to another.
Conversely, putting off interviews or dragging out the process can make it more difficult to make a final decision and leave you short-handed for longer, costing you more.
5. Enlist Your Other Staff
Many business owners prefer to be the only one to interview and interact with potential hires. This can be a costly hiring mistake. Introducing your other staff members to potential job candidates as you interview them gives you the opportunity to observe a short interaction with your current staff. Once the interview is over, ask your staff for their opinions on the job applicant. One of your current, trusted staff members may know something about the applicant that could prevent you from making a hiring error that costs your business money down the road.
6. Test Applicants
One of the worst mistakes you can make when hiring is to hire someone who is not fit for the position. I know a couple of business owners who made bad hiring decisions that could have been avoided by simply requiring all applicants to complete a simple typing test. As a result, it cost their company thousands in lost productivity.
7. Provide a Tour
Give job candidates a brief tour of your business. Watch them to see if they appear to be interested in their surroundings and the job in general. Get a feel for how they interact with your current staff. Observe them to gain understanding of their personality and respectfulness. These factors can give you some direction on whether or not they would be a good hire for your company. This way you don’t waste money by hiring the wrong person.
8. Ask the Right Questions
Hopefully you have a human resources department to aid you on your quest to find the right employee while keeping hiring costs down. However, if you do not, there are multitudes of ways you can find appropriate interview questions to ask job applicants. Your local library or the internet are a couple of resources that can help you develop an interview process that makes sense for your business. A few standard examples are:
- What are your strengths?
- What do you find challenging?
- Why do you feel you would be a good hire for this position?
- How do you handle pressure? Or How do you decide what task to complete next?
Of course, there are many other questions you could ask potential hires. Keep in mind you should ask the same questions of all applicants in order to ensure a fair hiring process.
You could also throw in a curve ball by asking a silly question, such as “If you could be any animal, which animal would you be and why?” This type of question can help you determine qualities you may not otherwise observe, such as creativity and how the applicant performs under pressure.
9. Partner with Colleges
As a business owner, you may not know that you could partner with a community college or university in your area to recruit and train new employees. Such agreements can be beneficial to the college student/employee by providing training as well as credits toward their college course work.
In addition, these partnerships can help the college plan coursework and expand classroom spaces, therefore helping them as well. But the benefits don’t stop there. Your business can also reduce hiring expenses through these agreements. A couple of the ways to achieve this is through increased retention of your employees, lowered training costs, and improved hiring decisions.
10. Use a Temp Agency
There are a lot of potential benefits to using a temp agency and nearly all of them add up to money savings for you. A few of the benefits include a shorter hiring time, paying less overtime for other staff, stress reduction for yourself and your staff (think losses in productivity or higher personal doctor bills, both of which add to your costs), and increased flexibility in your staffing. Each of these can aid you in lowering your overall hiring costs.
11. Offer Competitive Wages
One of the ways some businesses make hiring errors is by not offering a high enough wage for the position they are interviewing for. If you think offering a lower salary is going to save you money, the losses in productivity alone could make up for the amount you are trying to save. Make sure your wages are comparable to other like sized businesses or similar positions in your community. If you don’t, you may end up wasting your time finding the perfect candidate only to be turned down when you offer the job. Starting all over costs time as well as money to the bottom line of your business.
Every employer knows it costs money to hire for new or open positions in their business. But there are 11 ways to lower hiring costs and keep more money in your pocket.