Recruiting can be expensive. Whether you’re using a recruitment agency or going it alone with an online job board, there are going to be costs associated with building your dream team.

According to the Society for Human Resource Management (SHRM), the average cost-per-hire for a company in the US is now around $4700, and similar research by CIPD shows the average cost-per-hire for companies in Europe ranges from £6000 up to nearly £20k, depending on the role and industry.

These figures are made up of a mix of “hard and soft costs”. Hard costs normally include the easier-to-quantify numbers, such as HR software, recruiter salaries, or legal costs to write up new employment contracts. Soft costs are a bit harder to track, as they can cover things like the initial learning curve and lower productivity levels of your new employee, or time spent by hiring managers to interview or write job specs.

Why cost-per-hire is important

It shouldn’t need too much explaining to tell you why if you can reduce your cost-per-hire, you should. Most businesses don’t have an endless pot of money to draw from, and hiring costs can quickly eat into budgets that could be better spent on growth and development.

Using recruitment analytics to lower your cost-per-hire means you can allocate resources more effectively, making it possible to invest in other areas such as employee training, technology upgrades, or market expansion.

What are recruitment analytics?

Simply put, recruitment analytics is all the data that gives you insight into your hiring process.

They help hiring managers understand things like how long it takes and how much it costs to fill a role, as well as what the best sourcing channels are, and even how happy candidates are with the process. All this data can give you invaluable information into what’s working and what isn’t and can help you make predictions for the future, so you can continue to hire more efficiently.

Tracking recruitment analytics is worthwhile for dozens of reasons, but in this article, we’re specifically going to be looking at how understanding the numbers can reduce cost-per-hire for businesses.

How recruitment analytics can reduce cost-per-hire

1. Choosing and optimising sourcing channels

Sourcing channels are all the places you find candidates, including recruitment agencies or online job boards. Essentially, recruitment analytics can provide detailed insights into which sourcing channels are yielding the most successful hires at the lowest cost.

For example, you might find that using a niche job board is providing higher quality candidates for technical roles, or using an external recruiter is working better for hiring executive-level employees.

By analysing the output of your different sourcing channels, you can take a more targeted approach and avoid spending money on expensive channels that don’t give you what you need.

2. Creating better pre-screening processes

Pre-screening processes are all the ways that you get to know your candidates better, including interviews, technical tasks and personality tests.

Recruitment analytics can help you streamline the screening process by highlighting the most effective evaluation criteria and tools. You can then use these insights to refine your screening methods to help you identify top candidates quicker.

Implementing automated screening tools that use powerful technology like AI can further cut costs by efficiently filtering candidates based on predefined criteria, allowing recruiters and hiring managers to focus on engaging with the most promising candidates.

3. Reducing time-to-hire

By analysing the entire recruitment process, from job posting to onboarding, recruitment analytics can identify any bottlenecks and inefficiencies.

Reducing time-to-hire will lower many of the direct costs associated with recruitment, but also has a positive impact on the soft costs that go along with hiring, like the impact of empty roles on overall company productivity.

4. Improving the candidate experience

Analytics can track and improve the candidate experience, which is crucial for attracting top talent as well as making sure they don’t drop out part-way through the process because of a negative interaction. Data on candidate feedback, application processes, and engagement levels is vital for shedding light on areas that can be improved.

Good candidate experiences during the recruitment process can lead to better post-hire outcomes, too. A recent study by Glassdoor reported that 70% of companies they surveyed reported an improvement in the quality of their hires when they prioritised candidate experience.

5. Predicting candidate success

One of the most valuable (but often overlooked) aspects of recruitment analytics is its ability to predict the success and retention of candidates.

By examining historical hiring data and performance outcomes, you can develop predictive models that identify candidates who are likely to excel in your organisation. This reduces the likelihood of costly hiring mistakes and turnover, ensuring that your investment in recruitment translates into long-term employee success and reduced need for any re-hiring.

Find out more about this in our article looking at the true cost of “bad-hires”.

Conclusion

Reducing cost-per-hire through recruitment analytics can not only cut expenses, but also works towards creating a more efficient, effective, and strategic hiring process.

At Osavus, we empower companies to build stronger teams more efficiently and equitably by giving you access to powerful data-driven insights. Learn more about how we can support your recruitment needs and help you achieve your business goals with our advanced analytics and AI-driven solutions – sign up for our Early Access list today!