Ways Recruitment Automation Can Help Cut Costs In 2023
Recruitment is a vital process for building business size. However, it is also one of the most expensive processes in business.
The advent of recruitment technology has created a new way for businesses to streamline the recruitment process and make it more affordable for businesses.
One of these many solutions is recruitment automation. Are you interested in reducing the expenses of recruiting talents in your business? Here is everything you need to know about recruitment automation and how to implement it in your business.
Why Recruitment Is Expensive
Recruiting new employees is important in business today. It is a way to remain relevant in today’s competitive business ecosystem by adding top talents to the board of the business operation.
Businesses use recruitment as a way to foster business growth through talented new employees. It is also used to fill vacant positions because if they are left open for too long, it can negatively impact the quality of the workforce. Additionally, by recruiting new employees whose values align with the organization, businesses can continue to create a high-value work culture.
While there are numerous reasons why recruitment is essential to any business, there is no denying that the process can also be extremely expensive. One will expect recruiting new employees to be the cheapest process in business. However, contrary to popular opinion, recruiting new talents is possibly one of the most expensive administrative processes businesses have to deal with.
According to research and survey, the average cost per hire for recruitment is $4,700. However, many employers estimate that the cost of hiring talented employees may be up to three or four times the role’s salary. Essentially, a vacant $50,000 position may require a hiring cost of about $150,000.
But why exactly is recruitment expensive?
There is no formula for how much or how little a recruitment process should cost. However, generally, the process of recruiting top talents is more expensive.
Recruitment costs depend on a wide range of factors. Some of these factors include the cost of advertising the vacant position, the costs of screening or interviewing candidates, the costs of conducting background checks, and the costs of training the new hire.
Other monetary costs of recruitment may also include the salary of the recruitment team, the salaries of extra team members participating in the hiring process, and possible online job board fees. However, while these costs may be obvious, some recruitment processes have hidden costs.
These hidden costs come in the form of time wasted, outsourcing costs, and the costs of bad hires.
According to research by LinkedIn, the hiring process lasts three to six weeks on average.
In business, time is money. Hence, time wasted is time that could otherwise have been spent being productive. A recruitment process involves and requires time invested in hitting a recruit. This time spent hinders the potential of maximum productivity that a business will otherwise enjoy if they have the vacant position filled.
Additionally, bad hires or filling vacant positions with recruits that do not provide the perfect “fit” for the business may incur additional costs. This leads to restarting the recruitment process, having to pay more bills, and low productivity among employees due to the lack of an employer fit for that vacant role.
Couple this with the hidden costs of outsourcing recruitment to recruitment agencies, and it is easy to see why hiring employees can be expensive.
To make the hiring process more seamless while cutting expenses, many organizations resort to using recruitment automation.
What Is Recruitment Automation?
Recruitment automation is a technological solution that businesses or employers use to improve the recruitment process. Also known as hiring automation, recruitment automation allows organizations to automate recruiting tasks and workflows. By doing this, companies can cut costs of the recruitment process while also increasing recruiter productivity and accelerating the time necessary to fill a vacant position.
Traditional methods of hiring recruits may be effective; however, they are not efficient. As a result, these methods may be time-saving and require more resources than necessary.
Recruitment automation fixes this problem by eliminating the manual tasks involved in recruiting processes. By removing these tasks and automating them, the recruitment process becomes easier, faster, and cheaper. Some manual tasks that become automated include sourcing, pre-screening, screening, interviewing, and onboarding possible candidates.
Recruitment automation tools are steadily becoming popular thanks to the growth of advanced technological solutions such as Artificial intelligence (AI). AI-based technological solutions are rapidly being implemented across various sectors for different purposes. 76% of enterprises prioritize AI and machine learning (ML) over other IT initiatives in 2021.
Businesses use AI for several purposes, including marketing, operations, and sales. However, this technology is quickly becoming popular in the administrative sector of business as a recruitment solution.
AI boosts productivity at work. It is known for minimizing repetitive tasks and personalizing redundant processes. This is why it is a great solution for recruiting new hires in an organization.
How Does Recruitment Automation Work?
As an employer looking to hire a new employee, it is not unusual to become frustrated by the hiring process. Your desk will probably be swamped with CVs, and your time will probably be spent interviewing many applicants.
This process might take too long, and you may find it difficult to find the right “fit” for your company. To make matters worse, with the unemployment rate in the U.S. at 3.6% in 2023, you are bound to get many applicants. Many of these applications will be fodder and difficult to sift through.
Recruiting talents manually has grown increasingly difficult for companies as they struggle to fill in vacant positions. The processes are mundane, repetitive, and tiring.
Recruitment automation solves this problem by automating every stage of the recruitment process. It handles tasks such as sourcing candidates, assessing candidates, managing schedules, managing outreach, tracking applicants, and monitoring results. It also focuses on assessing talents fairly and without bias, ensuring only the talented and deserving applicants are hired.
Recruitment automation implements various software that leverages AI, ML, and predictive data analytics. These technologies are also integrated with an Applicant Tracking System (ATS) to streamline the hiring process.
An applicant tracking system is a software program that manages the hiring process. It can be customized to handle recruitment or hiring needs, depending on the needs of the small, medium, or enterprise-level business organization.
The combined power of these software applications makes it easier to streamline the recruitment process. Additionally, this technological solution can be customized for any vacant role in business. This makes it easier to choose the best candidate for that vacant position with minimal human input.
There are many reasons why businesses choose to implement recruitment automation in their hiring process. However, one major reason is to cut the high costs of hiring staff.
How Recruitment Automation Cuts Costs
The labor market is growing increasingly competitive. There are more applicants in the business world than there are vacant positions. This makes it increasingly difficult to quickly and effectively locate a talented individual who is the perfect fit for a business role.
Businesses quickly realize hiring applicants with the right skills is expensive and requires time. Recruitment agencies are spread thin, and the increase in inflation is making the hiring process more expensive than ever before.
As a solution, companies are resorting to recruitment automation to cut costs.
But how exactly does automation of the hiring process cut costs?
1. Attract A Wider Pool Of Potential Talents
Automated recruitment makes building a refined talent pool easier, a feat that cannot be achieved through manual processes.
When the recruitment is done manually, recruiters and employees must deal with a mix and match of clients with different skill sets and experiences. More problematic is that there is no way to automatically filter these applications to locate candidates with specific skills and/or experiences easily.
Wider pools have the potential to offer quality candidates with the life skills, qualifications, and experiences requested in the job posting. Building and managing this pool may be tedious when handled manually. However, the process becomes easier with an automated system.
By integrating technology into the hiring process, you can streamline the candidate sourcing process to reach out to multiple talented candidates simultaneously. Because it is easy to customize the sourcing process so that candidates come from a quality source, recruiters have time and ensure they reach many qualified candidates.
By utilizing gender-neutral and inclusive languages, you can make the pool more diverse than rigid. More importantly, the recruitment process is streamlined so that every candidate receives equal attention and communication without bias.
To build an effective talent pool, you can personalize all interactions and offer every talent the best experience possible. More importantly, you can do this without spending too much time on each candidate or breaking the bank.
Chatbots and CV parsing will speed up the recruitment process. This way, you can create an environment of streamlined recruitment using an Applicant Tracking System to attract candidates on a large scale.
2. Engaging Applicants To Prevent Abandonment
Candidates need constant interaction to remain interested in working with you. Without adequate communication between you and the applicants, you may suffer “application abandonment,” a phenomenon where applicants lose interest in working with firms.
Slow and inconsistent interactions trigger application abandonment. However, many recruiters struggle with this problem because there are just so many conversations they can have at once.
Sometimes, employers or team members in a company handle the employee recruitment process. However, these employers already have their daily responsibilities- such as meeting overload– which might make it difficult to constantly communicate with applicants, especially all at once. Without a means of communication with all candidates simultaneously, recruiters lose applicants and increase recruitment costs.
Automation solves this by making it easier to automate interactions. Recruiters can take it one step further by creating a self-service portal for applicants so they do not have to wait for the interviewer or recruiter to engage them. More importantly, these portals also give employers the visibility to track a candidate’s performance as they progress through the stages of the recruitment process.
You can also upgrade your recruitment automation process so the software collects data from all candidates in an organized and streamlined process. This will increase efficiency and decrease the money spent on the recruitment process.
3. Gather Insights And Knowledge
As mentioned above, recruitment automation can make it easier to gather insight into every candidate. More importantly, it will make it easier to compile every data in a seamless and organized form.
Gathering information is a critical part of any recruitment process. It is also usually one of the few that requires effort, time, and money to be completed. However, using an ATS, employers can extract data and form a trend. Doing this makes it easier to review employees at a glance. Employers can also turn this insight into a chart to compare all candidates.
With recruitment automation and ATS, data is at any recruiter’s fingertips. With the tap of a button, you can evaluate candidates to know which are the best hires.
4. Save Money On Other Tools And Apps
Automation tasks can ease the burden of using numerous applications and tools to conduct interviews. Without the need to continuously shuffle between tools, you can focus on the hiring and vetting process. More importantly, because many tools and apps require payment or subscriptions to be used, you can save money by having an ATS handle the entire process.
With automation, recruiters do not need multiple platforms, usernames, and passwords. There is no duplication of tasks or communication cracks due to the different tools.
ATS offers all functions, making sure all the tasks and interactions are in one place. This is cheaper and streamlines processes and interactions while easily sealing the gap between the recruiter and candidates.
5. Increased Hire Quality
Won’t it be a shame when you hire a candidate only to find out in a short while that you might have the wrong choice as they are not a fit for your company? Or find out they have not been meeting up to their KPIs? Of course, if everything else fails, the best option will be to let them go and begin the hiring process again. However, doing this will incur more costs than you already have.
Recruitment automation prevents this problem by ensuring recruiters can make quality choices via an efficient hitting system. With targeted candidate sourcing, constant communication, seamless onboarding, and consistent data collection, recruiters have everything they need to choose the right candidate for their establishment.
Choosing the right candidate is an investment that saves future costs on hiring another employee to take the role. As a result, it helps establishments save money on recruiting talent.
Saving Money With Automation
Automating the employee recruitment process does not only make it easier, but it is also a great way to reduce the costs of hiring a new employee.
Recruitment automation integrates the functions of any manually-executed recruitment process but makes it more seamless and streamlined. With technology taking care of redundant tasks, recruiters can focus on performing better with fewer costs.