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Recruiting Staff? Got £30,000 handy?

If you want to succeed in business there’s a magic formula. You have to drive sales up and manage costs tightly so they stay down. There’s not much more to it than that, although volumes have been written about how to achieve both parts of the formula. The costs of employing people is very high so if you re to manage successfully you absolutely must recruit the right people.

This week The Daily Telegraph released a figure claiming that the average cost for a UK company of recruiting one new employee is just over £30,000 – around £5,000 for the logistics of advertising and assessing candidates, and then a further £25,000 in losses for the company before the chosen candidate reaches optimum performance in his/her new job.

This rather sobering figure may not surprise those of us who undertake recruitment often, either for ourselves or on behalf of others, but it may come as a shock to quite a few. It’s amazing the number of executives who, when asked their normal staff turnover and retention rates, look completely blank! Are they equally ignorant of how much it is costing their company? You must have knowledge of costs to be able to manage them.

Newspapers, both national and local charge heavily for job adverts. Even the standard adverts without the whistles and flutes of additional tools, for example, being sent back to the of thousand just for one month. It used to be the case that you could play local newspapers off against each other like mobile phone companies to try and get the best deal for your advert. These days all of these papers’ job sections tend to be run by one or two very large corporations who have the upper hand from day one.

Once you have placed your advert, using social media like Facebook, LinkedIn and Twitter is a good way of spreading news of a job and increasing the potential reach of the ad.

Cost-conscious companies may work with university careers offices and job forums or use their own employees’ network of contacts to attract new staff. The problem is that while they’re OK in themselves if you only recruit using these methods is may give rise to allegations of discrimination because the likely field of candidates will be generally fairly narrow (especially if your workplace is dominated by employees of the same gender or ethnic make-up). You should generally use them as a strand of a broader approach so you can evidence that you are trawling the job-seeking market more broadly.

The question you have to ask yourself as an employer is whether you actually need to take on anyone new, particularly if you’re considering it because someone has recently left. Even if you expect to have to recruit someone new in the end (which is often necessary),it can’t hurt to critically review the requirement or trial a few ideas to try and stave off that £30,000 bill.

Can the role be outsourced, or broken up internally? Can existing systems be improved to make better use of staff time? Sometimes the role cannot be completely broken up, but you may be able to transfer important functions to an existing staff member, leaving only a junior role to be filled. This should bring down logistical costs to just local area advertising, and hopefully the profit loss as well if fewer vital tasks are being undertaken by the new team member.

This model may also apply if you are considering creating an extensive new role but realise some of the tasks could be done by existing staff, or if there is an ideal employee in the company ripe for promotion to the vacant position.

It is also important to consider whether a team member who has left was fully occupied. Sometimes people leave for that very reason. It will become a self-perpetuating cycle if a company fails to review that role and brings in a new carbon copy of the old employee, only for them to leave after a lack of job satisfaction. Another £30,000 down the tubes (or however much it really costs you).

A final point to consider if you are thinking about replacing like for like is for how long the job will remain relevant. What will the business look like in three years? Is this a golden opportunity to bring in ‘a good person’ who not only can do most of the currently required jobs, but who also has the skills you are expecting to need later on? At times plenty of companies like to focus on the people they recruit rather than the specific job, if they have ambitions of change and expansion. If done well, this could really make that £30,000 an investment instead of just a bill.

In the end the question you should always be asking yourself in business is “Am I getting value for money?” In HR, this question should be asked all the way from structure to recruitment, to performance management and to termination.

Russell HR Consulting provides expert knowledge in HR solutions, employment law training and HR tools and resources to businesses across the UK.

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