The first step to reducing hiring costs is to understand where the hiring costs come from. Did you know that it can cost anywhere from $10,000 to more than $250,000 for a new hire! If you’re surprised, so were we! Here is where those hidden costs come from:

Overlooked Hiring Cost #1: Internal Hiring Manager’s Time

Time an internal manager is spending searching, contacting and hiring is considered a cost. If your internal hiring manager makes $60,000 per year, that is a $60,000 cost incurred when hiring a new employee!

Overlooked Hiring Cost #2: Assisting Employees Time

This is becoming a growing trend. Instead of having just one person interview a potential candidate, several people are. If your current employees have to take time away from their day to interview a potential candidate you are not only paying them to do something outside of their job scope but you are loosing money by putting of their responsibilities.

Overlooked Hiring Cost #3: Entertainment

If you take a potential candidate out for lunch or to a ball game or even out for a game of golf, that is a cost! Even if you only spend $10.00 per candidate, when you have ten or fifteen candidates throughout the year, it adds up!

Overlooked Hiring Cost #4: Advertising

Not everyone is aware of free job boards such as InovaHire.com so they resort to advertising in papers or on other job boards costing them anywhere from $75.00 to $475.00 per ad!

Overlooked Hiring Cost #5: Travel

Flying in a potential candidate can get expensive, especially if they don’t work out! Did I also mention the cost of a hotel room and rental car! Eeek!

Overlooked Hiring Cost #6: Assessment/Testing

Testing and assessment is necessary, but if you test and assess every candidate it can get expensive.

Overlooked Hiring Cost #7: Third Party Recruiting Services

While recruiters can save you time, they won’t necessarily save you money. Depending on the company you choose, commission costs can equal that of another employee’s salary!

Now that you are aware of the costs involved and often overlooked, it is now time to take a peak at what you should be doing to reduce hiring costs!

Reduce Hiring Cost Tip #1: Attract Candidates Through a Free, Robust Career Site

InovaHire.com is my personal favorite. They offer a 100% free job board, and yes, they really are free! Another great feature they offer for free is the ability for you to interview candidates live online via a webcam! There goes your entertainment and travel costs! Not only are you saving time but you are saving money as well!

Reduce Hiring Cost Tip #2: Draft Ads With Candidates Interests in Mind

Stop with all your newspaper advertisements! Just stop! If you have a free online resource available that can reach hundreds of more people, why would you still pay for a newspaper ad? When you are creating that ad, make sure you include not only what you need but what you think will interest a potential candidate as well. There are nicer ways to say, “you will have to work like a dog!”

Reduce Hiring Cost Tip #3: Force Candidates to Show Their Skills

InovaHire.com offers a valuable tool to both employers and candidates. They allow candidates to upload work examples. This includes pictures, power points, presentations, word docs, you name it! If you can visually see what they have done it will help you to make a more informed decision.

Reduce Hiring Cost Tip #4: Test and Assess When Necessary

Don’t test and assess every candidate that submits a solid resume. Make sure to perform multiple interviews and only invest in the candidates you feel are worth investing in. The less money spent on unnecessary the costs, the more money that can be invested back into your company and employees!

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