When a role opens up, a wide range of hands come together to support the recruitment process, from creating job descriptions and materials to scheduling interviews and negotiating salaries. With the competition for tech professionals at an all-time high, filling high-impact roles is more difficult than ever. And the longer a position remains vacant, the more disjointed teams become and the more money that’s lost.
The average cost-per-hire seems relatively low at $4,425, but this number doesn’t account for lost productivity, missed deadlines and decreased employee morale — all of which impact the bottom line. Building a reputation as a tactical tech recruiter with the company’s long-term objectives in mind will help you earn a seat at the strategic table, ultimately benefiting the business for years to come.
The Business Impact of Recruitment
Proving the business impact of recruitment is a bit of a catch-22; your team needs certain resources — enough personnel, a budget, several recruitment tools — to demonstrate its value to leadership, but needs to be seen as valuable by leadership in order to gain access to these resources.
According to a study by Bersin by Deloitte, the average cost-per-hire for organizations with an “optimized talent acquisition” strategy — a mature, formalized process that allows talent teams greater decision-making influence — is $6,465, compared to $3,258 for business units with “reactive tactical recruiting.” Don’t get caught up in these numbers — the long-term value greatly outweighs the upfront expense: optimized talent acquisition organizations experience 40% lower new-hire turnover.
Additionally, mature recruiting organizations boast shorter time-to-fill rates, hiring for open roles on average 20% faster than organizations with ad hoc recruitment strategies. This difference illustrates that streamlined, robust recruitment strategies are more effective and result in less productivity loss due to roles remaining unfilled.
7 Business Problems Recruiters Help Solve
If the team functions like a well-oiled machine, it’ll have a positive impact on the business, attract great candidates and reduce turnover. However, if it doesn’t, your team will waste a lot of time and money and may miss out on top talent. A strong recruitment strategy founded on an organization’s long-term objectives is key to earning the respect of the C-suite.
Below are 7 real challenges companies face, along with an explanation of how recruiters can help address them — when adequately staffed, resourced and granted a seat at the table.
Problem #1: The tech unemployment rate is at a historic low, making candidates hard to come by.
How Recruiters Solve It: With the job seeker market being roughly 90% candidate driven and there being 3.7 million tech job postings in 2018 alone, it’s no wonder why so many companies have vacant positions. Job seekers can afford to be picky, shop around and take their time.
How to Talk to Leadership: In a candidate-driven market, recruiters will scramble to A) find the right people for the job, and B) make them an offer they can’t refuse. To beat out other organizations for elite candidates, talent teams need adequate resources and insight regarding the leadership team’s vision.
By including recruiters in strategy meetings, talent teams are able to thoughtfully account for growth goals and prepare for openings before roles become vacant. Understanding the business’s long-term objectives empowers recruiters and HR professionals to proactively recruit and build a solid talent pipeline, ultimately reducing the company’s time-to-fill, cost-per-hire and revenue lost due to an unfilled position.
Problem #2: Today's talent shortage means roles remain unfilled for longer.
How Recruiters Solve It: Talent acquisition professionals spend on average 13 hours sourcing candidates for a single role. If recruiters spend almost one-third of the work week on a single hire, they won’t be able to meet the company’s skyrocketing hiring needs. A fully staffed recruiting team can quickly source candidates, identify qualified professionals and fill roles before vacancies become too costly.
How to Talk to Leadership: On top of developing candidate personas, building out referral programs, writing job descriptions and training staff for interviews, talent acquisition professionals are responsible for, well, getting talent in the door. Without enough hands on deck, recruiters will reach their bandwidth quickly and have to expedite all aspects of the hiring process, decreasing the quality of the candidate pool and increasing the likelihood of a bad hire.
Problem #3: Poor retention negatively impacts the bottom line and employee engagement.
How Recruiters Solve It: The best way to improve retention is by hiring the right people for the job. How? Knowing who it is that hiring managers need and how leadership envisions the role will contribute to the business’s success. The tech sector — specifically software jobs — has the highest turnover rate at 13.2%, making it all the more vital that recruiters are equipped with pertinent company information to make the best hiring decision.
How to Talk to Leadership: Cost of turnover estimates suggest that losing an entry level employee will cost 50% of salary, a mid-level employee 125% and an executive upward of 200% of annual salary. To make quality hires that mitigate this cost, the recruitment team needs the input of hiring managers to build out accurate candidate personas, as well as the leadership team to determine hiring priorities.
Not only that, but advanced notice — i.e. strategic workforce planning and industry knowledge — gives recruiters enough time to properly source, vet and hire quality candidates. Allocating the resources for an employee referral program has a significantly more positive impact on the business than standard sourcing methods: referred employees generate 25% more profit than hires sourced through other channels and can reduce time-to-hire by 40%.
Problem #4: Bad hires lead to unnecessary churn, profit loss and low morale.
How Recruiters Solve It: Getting the right people in your open desks the first time around saves you time, money and great employees. When properly staffed and resourced, a recruiting team can make sure the right people are in place to reduce unnecessary churn and help the organization reach its growth goals.
Bad hires are the cause of 80% of employee turnover, which often leads to additional separations due to overwhelming workloads when trying to cover a vacancy. Conversely, top performers are estimated to be worth 10-100 times their annual compensation. Including recruiters in conversations about long-term business goals and hiring needs enables them to strategically approach recruitment so the best people are hired and the company continues to grow.
How to Talk to Leadership: If it isn’t done right the first time, you’ll probably just have to start the search again. Being thoughtful with candidate personas, job descriptions and interview questions increases the likelihood of a strong talent pool, solid hire and lower turnover rate.
However, you can’t spend forever sourcing candidates and eventually a decision needs to be made. Don’t recruit slower; recruit smarter. Dedicate the resources and budget the talent acquisition team needs to implement an ATS to track elite candidates, aptly train interviewers and successfully promote job postings. Investing more upfront will pay off in the end when you’ve filled the role with the right person, kept them engaged and financially benefited from their contributions.
Problem #5: The longer a role remains vacant, the more damage is done.
How Recruiters Solve It: Regardless of position, the average time-to-fill is 36 days. For tech roles, however, that time frame becomes increasingly more problematic: it can take up to 62 days to fill an engineering role, 56 days to fill a tech role and 52 days to fill a sales position.
Every day without an employee in a role adds to the accruing loss of revenue, productivity and employee morale. With the right resources and unbarred access to key stakeholders, recruiters can improve the efficiency of the process and make well-informed hiring decisions that benefit the business.
How to Talk to Leadership: Sure, you can manage for a month, but think about this: how much will you spend on a contractor to keep your projects on track? How many projects won’t stay on track? How much overtime will you pay employees who step up? How many employees will you frustrate and risk losing by asking them to work two jobs? The longer a role is left open, the more susceptible your business is to shortcomings and failures.
Problem #6: Job seekers judge your company way before and long after the first interview.
How Recruiters Solve It: 75% of job seekers consider a company’s employer brand before deciding to apply to a job. Including HR and recruiters in strategic planning meetings gives them the information they need to thoughtfully and accurately build your employer brand, which impacts the quality of your talent pool and thus hire.
How to Talk to Leadership: Even if they don’t receive an offer, job seekers are still inclined to consider your organization as a potential employer; 95% of candidates will apply to an organization again if they had a positive candidate experience. If they enjoyed their experience, past candidates will be your biggest promoters. If not, you’ll have created detractors who can harm your chances of success when recruiting in the future.
Conversations about your company culture, mission statement, long-term vision and core values all inform the reputation you build for yourself as a potential employer. In order to create a strong employer brand and candidate experience that will improve your recruitment odds down the line, the talent team needs to be a part of strategy meetings today.
Problem #7: There’s a disconnect between the current workforce and the company’s long-term objectives.
How Recruiters Solve It: Talent acquisition professionals are your boots on the ground for taking your company where you want it to be. Put it this way — you need people to reach your company’s goals, and you need an internal team to find those people. The more involved your talent team is in broader conversations, the better chance you’ll have at adding the right people to your team.
How to Talk to Leadership: 63% of hiring managers believe recruiters don’t have a good sense of the roles they’re filling, while 57% of recruiters feel that hiring managers don’t understand the recruitment process. A successful recruitment process is founded on communication. Hiring managers have the most knowledge about the ideal candidate, leadership has insight on business objectives, and recruiters know the industry. Open communication between these parties equips tech recruiters to hire the best candidate not as a short-term fix, but a long-term solution.
Bringing recruiters into the fold as soon as a role becomes available ensures they have the necessary information to source the elite candidates that leadership and hiring managers desire. Without a seat at the table and an ear on these conversations, talent acquisition professionals can’t guarantee the job seekers they’ll identify will meet the team’s needs.
Strategic recruiters are the focus of a company’s 2020 growth goals, but they need adequate resources to be successful. Including recruiters in broader discussions about the company enables them to make crucial hires that align with your organization’s vision. The gist? Give recruiters the resources they need to be strategic and invest in their efforts to grow your business.
