Reducing Cost Per Hire | No BS HIring Advice


In this video, I offer several ways to consider when thinking about reducing cost per hire.

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I want to talk to us an HR professional, or as a hiring manager about different ways that you can reduce your cost per hire. Now, I'm going to start off by simply saying, where you can save money, it's always smart. As such, looking at cost per hire is a smart approach to how you run your business, how you add to your team. In doing reduced cost per hire, there's no guarantee that you're going to be sacrificing anything. If anything, in many cases, it's far more efficient. So let me offer you a couple of different ways.
First of all, travel is becoming expensive. So you can create virtual job fairs, where you bring in a number of people to interview and do it online, rather than, shall we say, flying off to meet someone.
Another thing that you can do, this one I know is pretty controversial, is the notion of declaring that you're going to pay a flat fee per hire. Now, I would say is, you can decide, for example, for positions under a certain amount of money, you'll pay one fee for positions over a certain amount of money, you'll pay a different one. So, for example, for a position under $100,000, where you might normally pay a minimum of a 20% fee, announced that you're going to pay a flat fee of 13 or $14,000. If you're going to do it for over $100,000, you might simply say for $100 to $150, you're going to pay $17,000 or $18,000. Over $150 to $250, you're paid 25,000. In each case, you're discounting off the standard fee.
Now, some of your existing recruiting sources will be up in arms and they'll respond by saying, "What! I can't get my recruiters to work on this fee. We have a choice between, a firm that wants us to pay a discounted rate, one that's going to pay our standard fee. Where do you think we're going to put our efforts in?" And the answer from both sides will be, "you'll make that choice, just like I'm going to make the choice about giving you this opportunity. So it's not like you're the only search firm in this area that'd be willing to work with us on this basis. I can certainly go to someone else. It's going to be your choice, and we're going to look at performance and, going forward, because at the end of the day, we're performance-based business." And you know, a lot of firms will cave at that point. So look at how you can reduce fees by just announcing a flat rate.
Doing interviews via Skype. Why are you dragging people into the office? Why are you interrupting your own work day to walk out to a conference room, where you can just be sitting online talking to people and doing it via Skype?
Also, in terms of networking, encourage your employees to post to LinkedIn. Perhaps there's a way that you can create a link on your website so that they can post out to LinkedIn, get credit for the post, if someone's hired. There are any number of sites right now for search firms and employee referrals and hiring, where people are able to post out jobs to their LinkedIn network, Twitter feeds, earn a commission of someone's hire. Why can't you do that for your own people? Certainly, they'd be very happy to make $5,000 a hire. You can set the condition of the person has to remain an employee for four months, for example. That's like an agency guarantee plus, and then probably, you know, have someone personally deliver the check to them. So that, this way, they have that moment where they're actually receiving the money for what they did. You can teach people to post on LinkedIn, you can show them how to network. So, remember, you want people out there talking to others and promoting the organization.
You can create a video for YouTube that directs people to your website, and promotes the organization as a great place to work.
These are a couple of very simple things. Of course, posting to YouTube is free. There's just the production costs. And, you know, what I suggested in another video, I think works very well is use a service like blab.im (Blab is no longer in business. You can use a Facebook Live) where you have an HR professional there who functions is like a master of ceremonies or mistress of ceremonies. you have the immediate hiring manager, a member of the team, and the overall area manager. The HR person says "we're trying to fill a position now working for so and so. I'm going to let him tell you about the role here."
He or she comes out and he tries to be engaging, has a personality, and talks about the job and what it's going to be like. Then, from there, I'd like to have you listen to someone who's working in this group and talk about what they're actually doing. Mentally they have something scripted out; you can't have this ad hoc where they come across as being unpolished, or a loser.
Then, from there, we have the overall area manager, talking about opportunities for advancement within the group and within the division, so that people get a sense that they've got a future in the organization. Circle back to HR, talking about how to apply for the role, direct them to the website where they can create an application. Please make the application easy. And I want to ensure that you have a way that you can have people submit their resumes through their mobile devices otherwise, you're going to lose half the potential traffic because that's how much people are using mobile phones these days, searching for work.
So those are a few ideas for reducing your cost per hire. In that last example, where I have the four people interview, use a free service and they will send you a link to the video that you can use anywhere you want. You put it up on YouTube. Take it down with the position's over. Again, it's thinking creatively to take advantage of some of the technology tools out there in order to be effective.

I want to talk to us an HR professional, or as a hiring manager about different ways that you can reduce your cost per hire. Now, I'm going to start off by simply saying, where you can save money, it's always smart. As such, looking at cost per hire is a smart approach to how you run your business, how you add to your team. In doing reduced cost per hire, there's no guarantee that you're going to be sacrificing anything. If anything, in many cases, it's far more efficient. So let me offer you a couple of different ways.
First of all, travel is becoming expensive. So you can create virtual job fairs, where you bring in a number of people to interview and do it online, rather than, shall we say, flying off to meet someone.
Another thing that you can do, this one I know is pretty controversial, is the notion of declaring that you're going to pay a flat fee per hire. Now, I would say is, you can decide, for example, for positions under a certain amount of money, you'll pay one fee for positions over a certain amount of money, you'll pay a different one. So, for example, for a position under $100,000, where you might normally pay a minimum of a 20% fee, announced that you're going to pay a flat fee of 13 or $14,000. If you're going to do it for over $100,000, you might simply say for $100 to $150, you're going to pay $17,000 or $18,000. Over $150 to $250, you're paid 25,000. In each case, you're discounting off the standard fee.
Now, some of your existing recruiting sources will be up in arms and they'll respond by saying, "What! I can't get my recruiters to work on this fee. We have a choice between, a firm that wants us to pay a discounted rate, one that's going to pay our standard fee. Where do you think we're going to put our efforts in?" And the answer from both sides will be, "you'll make that choice, just like I'm going to make the choice about giving you this opportunity. So it's not like you're the only search firm in this area that'd be willing to work with us on this basis. I can certainly go to someone else. It's going to be your choice, and we're going to look at performance and, going forward, because at the end of the day, we're performance-based business." And you know, a lot of firms will cave at that point. So look at how you can reduce fees by just announcing a flat rate.
Doing interviews via Skype. Why are you dragging people into the office? Why are you interrupting your own work day to walk out to a conference room, where you can just be sitting online talking to people and doing it via Skype?
Also, in terms of networking, encourage your employees to post to LinkedIn. Perhaps there's a way that you can create a link on your website so that they can post out to LinkedIn, get credit for the post, if someone's hired. There are any number of sites right now for search firms and employee referrals and hiring, where people are able to post out jobs to their LinkedIn network, Twitter feeds, earn a commission of someone's hire. Why can't you do that for your own people? Certainly, they'd be very happy to make $5,000 a hire. You can set the condition of the person has to remain an employee for four months, for example. That's like an agency guarantee plus, and then probably, you know, have someone personally deliver the check to them. So that, this way, they have that moment where they're actually receiving the money for what they did. You can teach people to post on LinkedIn, you can show them how to network. So, remember, you want people out there talking to others and promoting the organization.
You can create a video for YouTube that directs people to your website, and promotes the organization as a great place to work.
These are a couple of very simple things. Of course, posting to YouTube is free. There's just the production costs. And, you know, what I suggested in another video, I think works very well is use a service like blab.im (Blab is no longer in business. You can use a Facebook Live) where you have an HR professional there who functions is like a master of ceremonies or mistress of ceremonies. you have the immediate hiring manager, a member of the team, and the overall area manager. The HR person says "we're trying to fill a position now working for so and so. I'm going to let him tell you about the role here."
He or she comes out and he tries to be engaging, has a personality, and talks about the job and what it's going to be like. Then, from there, I'd like to have you listen to someone who's working in this group and talk about what they're actually doing. Mentally they have something scripted out; you can't have this ad hoc where they come across as being unpolished, or a loser.
Then, from there, we have the overall area manager, talking about opportunities for advancement within the group and within the division, so that people get a sense that they've got a future in the organization. Circle back to HR, talking about how to apply for the role, direct them to the website where they can create an application. Please make the application easy. And I want to ensure that you have a way that you can have people submit their resumes through their mobile devices otherwise, you're going to lose half the potential traffic because that's how much people are using mobile phones these days, searching for work.
So those are a few ideas for reducing your cost per hire. In that last example, where I have the four people interview, use a free service and they will send you a link to the video that you can use anywhere you want. You put it up on YouTube. Take it down with the position's over. Again, it's thinking creatively to take advantage of some of the technology tools out there in order to be effective.

ABOUT JEFF ALTMAN, THE BIG GAME HUNTER

Jeff Altman, The Big Game Hunter
Jeff Altman, The Big Game Hunter

Jeff Altman, The Big Game Hunter is a career and leadership coach who worked as a recruiter for more than 40 years. He is the host of “No BS Job Search Advice Radio,” the #1 podcast in iTunes for job search with more than 1500 episodes and his newest show, “No BS Coaching Advice.” He is a member of The Forbes Coaches Council. “No BS JobSearch Advice Radio” was recently named a Top 10 podcast for job search. JobSearchTV.com was also recently named a Top 10 YouTube channel for job search.

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