These days hiring demands are up and budgets are down. Gone are the days when companies threw unlimited resources and money at a competitive market to get quality hires. Today, HR is expected to pull “the best” hires out of thin air in a short period of time with little or no budget. Welcome to the modern recruiting landscape where you MUST reduce your cost per hire!

You may be resigned to low budget means of unearthing candidates and simply put your head down and forge ahead. However, it is possible to maximize your recruiting spend so that you get more for your money and reduce your overall cost per hire.

The first thing you need to do is to track your cost per hire, so that you know where you’re starting. Information that should be included in the overall cost per hire, might include the following items:

• Recruiter salaries and benefits

• Contingency or retained fees

• Candidate travel

• Recruiter or hiring team travel to events such as colleges or career fairs

• Advertising

• Applicant Tracking System costs

• Support staff, including administrative, sourcing and technical team members

• Relocation and immigration costs

• Recruiting resources, such as LinkedIn, Monster, Careerbuilder, etc.

• Employee referral programs

Once you obtain this information, the formula is simple.

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Recruiting Costs ÷ Number of Hires = Cost Per Hire

Once you know your cost per hire numbers, then you can utilize these five tactics to reduce your overall cost per hire:

1. Virtual Job Fairs – Travel costs have become exorbitant, especially when you are sending team members whom are paid by the hour (such as contract recruiters!). These days, you don’t have to spend money on travel for events. There are cost effective tools available to host or attend job fairs on-line as if you were attending in person. And if you simply have NO budget, you can always arrange your own job fair using tools such as Google+ Hangout.

2. Skype Interviews – Similar to Virtual Job Fairs, Skype offers the ability to conduct online, face-to-face interviews. Nearly everyone has access to Skype and a high-speed Internet connection, so using Skype could greatly reduce the costs of travel for candidates.

3. Teach your employees how to use their network – Yes, all of your employees. Remember the old shampoo commercial where they show a woman with great hair. She tells two friends about the shampoo…and they tell two friends…and they tell two friends…and so on…meanwhile the image of her multiplies? That is a terrific illustration of how powerful ones network can be! Set up a training series, which teaches all employees how they can use their network to promote good hiring. And reward them with an employee referral bonus.

4. Post it on LinkedIn for free – In addition to teaching employees how to use their network, they should also know how to use their social media to get the word out. You don’t need an expensive LinkedIn Recruiter account to enjoy the benefits of the social network.

5. Consider a Recruiting Process Outsourcing (RPO) model – When you factor in all of the benefits that a good RPO can bring to the table, such as recruiters, administrative support, applicant tracking, all sourcing tools, a built in network, reporting and the lack of need for office space, RPO can be a great means to reduce your cost per hire. You can choose from either a full-scale RPO model that will replace most of your existing Recruitment function, or a much simpler and less risky and intrusive version called “On-Demand RPO” (also known as Limited RPO or Partial RPO) that will merely supplement (not replace) your recruiting team, and can be turned on and off in real-time without fuss.

Check back here regularly as we examine additional ways to reduce your cost per hire. And be sure to comment on any good tips you’d like to share!

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