Finding talent is important to the growth of any business, but for small businesses in particular, hiring high performers is especially critical to success. At the same time, small businesses’ hiring teams often don’t have the luxuries that larger organizations have. Resources tend to be scarce, and small teams’ hiring leaders often have multiple responsibilities and need to wear different hats. That means that it’s vital to be as efficient as possible when it comes to recruiting.
One key way to accomplish this is to automate your processes early on in recruiting while maintaining a lean budget. In terms of the latter, there are five primary components that you need to work into your budget:
- Job Advertising
- Employee Referral Bonus Program
- Recruiting Agency Costs
- Employer Branding
- Recruiting Systems & Tools
Below, I’ll give a breakdown of what you need to take into account when budgeting for all of these elements – as well as insight into how software solutions can save you precious time and effort along the way.
Advertising your openings on job boards can be expensive if you don’t have a well-thought-out underlying job posting strategy in place. After all, there are thousands of job boards available for every niche and market, and while there are certainly some free job boards that can get your opening in front of candidates, you’ll likely also want to use paid boards to elevate your sourcing efforts in today’s competitive environment.
When it comes to the latter, be aware that there are three primary pricing structures that these boards use: flat rate, cost-per-click (CPC), and cost-per-applicant (CPA). For small businesses on a tight budget, CPC boards that only charge when a candidate clicks on your posting are good options; however, you do need the time to manage the campaigns you put in place on these boards.
If you’re looking to automate this process and save time and money, one option is to use a solution like MightyRecruiter, which posts and promotes on your behalf to hundreds of job sites at once.
Employee Referral Bonus Program
Employee Referral Bonus Programs that incentivize referrals from your current team members are a great way to accomplish hiring goals. They not only result in the fastest time-to-hire, but they also correspond to higher retention rates in the long run. While 69 percent of organizations with these kinds of initiatives offer between $1000 and $5000 to workers who bring in qualified candidates, cash-strapped small businesses may want to consider substituting monetary rewards with prize drawings, company merchandise, and extra vacation days.
However, do keep in mind that employee referral programs can save organizations as much as $3000 per hire, so it might very well be worth it to attach a small bonus payment to the effort if it better motivates your staff.
Recruitment Agency Costs
If time and bandwidth are what you have the least of as an SMB hiring leader, then you may want to consider outsourcing to a recruitment agency. Here is a quick breakdown of the different pricing models that you should know about if you opt to go this route:
Contingency: This is a risk-free model for most companies, but it’s often the most expensive. The fees range from 15-20% of the first-year salary of the hire and often include a candidate guarantee period of 90 days.
Contract-to-Hire: The model applies when a candidate is on the agency’s payroll and the agency bills the client hourly for the candidate. The hourly fee includes a markup on average of 35%, and the client can usually hire the candidate within 6 months with no fee.
Retained Search: This is another model which has an upfront fee of 10% of the estimated first-year salary of a hire as well as an additional 10-15% addition if the candidate his hired. This model has a guarantee period as well, which is generally 120 days.
RPO: This is another model that has either a retainer fee or flat pricing fee per position per month. A team works on your positions at that fee. There is no guarantee with this model, and it is often the model used at large companies to fill bulk positions.
Independent Contract Hourly Recruiter Model: This project-based model doesn’t have a guarantee; however, it is the most cost-effective model because the recruiter will be dedicated and working on more than one position.
Tip: Consider hiring an experienced hourly recruiter to fill positions. It will improve the candidate and hiring manager’s experience. The average independent recruiter hourly fee is $85 per hour. For the cost to fill one position which at average is $22,113, you would get a dedicated hourly recruiter for 260 hours. In that time, they would more than likely fill more than one position and create pipelines for other positions.
Having a strong employer brand is extremely important for several reasons, not least of all the fact that 69 percent of workers say they won’t accept a job with an organization that has a poor employer brand, even if they’re unemployed.
One easy way that small business hiring leaders can start to promote a positive employer brand is the creation of an engaging and informative career page, which is important because it is one of the first places candidates go to research your company. The most successful career pages have original photos – not stock photos – as well as engaging videos. To save money and to look original, take your own company photos with real employees and allow these same employees to share their stories. This costs nothing, and funny enough, it’s exactly the kind of information that jobseekers want to see.
Also, MightyRecruiter can help you create your career site without knowing a line of code or needing any special tools or additional financial outlay.
Recruiting Systems & Tools
Applicant tracking systems and recruiting solutions can hands down make the hiring process simple and effective for both applicants and recruiters. However, choosing the best technology for your business and its needs can be incredibly difficult. Read our step-by-step guide to choosing hiring software here, and keep in mind that most of the solutions out there offer free trials. So you can often test drive technology for no cost and then decide which gives you the most bang for your buck.