Hiring people who are the right fit for the job, your company’s growth goals, and your culture always requires a financial investment. According to data from the U.S. Small Business Administration, you can expect to pay up to 1.4 times the salary of the person you choose. Yet, that statistic can be deceiving because it only reflects hard costs and doesn’t consider how empty positions and bad hires can fiscally impact your organization.
For instance, think beyond all the time, energy, and resources you put into finding a new sales manager. Instead, consider what can happen if the sales manager doesn’t gel with the rest of the team or they leave within the first couple of months, regardless of the reason. In this case, all the hard-earned morale and engagement you’ve built can plummet — leaving you scrambling to fix everything … and spending even more money.
You can’t get around the need to hire, of course. However, you can mitigate hiring costs by partnering with a talent acquisition recruitment process outsourcing (or RPO) firm. How can outsourcing assist in the recruitment process in financially appealing ways? Take a look at the following cost-related benefits of outsourcing recruitment and selection process strategies:
1. Outsourcing can help you contain internal hiring costs and third-party agency costs.
Perhaps you already have an internal recruiting team comprising a manager, recruiters, coordinators, and administrators. Chances are very strong that you have decided how big or small to make your team based on fixed factors. For example, you might have looked at the average number of people you hire annually to determine how many internal hiring professionals you need.
The issue is that hiring can be highly variable. Case in point: One of our clients, on average, hired 400 people a year. In 2021, the company wound up needing more than 2,000 new hires. If their leaders had been forced to handle everything internally instead of working with us, they would have had to hire more internal talent acquisition team members consuming valuable and scarce resources. In turn, this would have stressed their hiring team, risked negative candidate and hiring manager experiences, and overspent on last-minute, reactive solutions such as paying recruitment agencies and contract recruiters.
2. You can avoid adding more tech.
Although it’s essential to stay on top of the latest tech, you can’t keep buying subscriptions to new tech or paying developers to upgrade your current systems. Yet, that’s what you’ll have to do if you maintain an internal-only hiring team. Eventually, your hiring team will need tools like the most advanced CRM and sourcing platforms just to keep up with your competition and appeal to applicants. These tools and resources can have extremely high out-of-pocket expenses that may be unaffordable for an internal talent acquisition team.
Of course, RPOs need to keep up with all of these tools; however, because an RPO provider like Personify works across multiple clients, the costs of these tools are spread across the breadth of the client base. Consequently, some of your outsourcing cost savings come from your relationship. Your company doesn’t have to find the budget to stay at the leading edge of talent acquisition tech: That’s the role of your RPO.
3. You can relax knowing that hiring flexibility is within your reach.
At Personify, we offer RPO solutions that flex. They’re not set in stone, meaning you don’t have to pay more for what you need. Our differentiator in the hiring community is that we allow our clients to scale their recruitment efforts up or down in real-time. This just-in-time service drives serious cost savings through efficiencies.
At Personify, we offer a variable pricing model, so you only pay for the recruiting resources you need. In our model, recruiting costs run in lockstep with volume. When your company has higher volumes, you will pay more in total, but your costs per unit will decrease. On the other hand, when your company doesn’t need as much in terms of recruitment and hiring help, your costs remain low because we charge on a per-requisition basis versus the high monthly fixed fees you incur with some of the biggest RPO providers. If you relied solely on a set internal team, your expenses would be fixed even as your recruitment support needs fluctuate. That leads quickly to budget waste and sunk costs.
4. You might qualify for lucrative volume discounts.
Another unique aspect of working with us is our talent acquisition RPO model that allows for volume discounts. Volume discounts are extremely cost-effective because they reward you for a higher level of utilization. You can temper your overall spending when you commit a specific amount of work and annual hires to us. By comparison, recruiting agencies tend to charge anywhere from 25% to 30% of employees’ base salaries.
In addition to volume discounts, you can greatly reduce your time to fill. In turn, this increases your ability to maintain a productive workforce and generate more revenue. Historically, Personify’s clients have been able to improve their time to fill by roughly 31%.
When you combine the ability to drive cost savings through efficiencies, move your talent acquisition model from a reactive state to a proactive steady state, and reduce key performance metrics such as time to fill and quality of hire, you begin to see the benefits of partnering with an RPO like Personify to optimize your talent acquisition function.
Want to see if an RPO could be beneficial for your company? Contact Personify to learn more and take your hiring savings to the next level.
Matt Ward is the head of RPO sales at Personify, an award-winning, globally recognized recruitment process outsourcing firm. Matt joined Personify’s executive search division in 2009, becoming the talent acquisition and account leader for multiple RPO programs and then the senior manager of enterprise sales. Currently, he leads global RPO business development.