To spend or not to spend? When you’re thinking about your recruiting budget, that’s one of the key questions you need to ask. Many small businesses fear putting too much time and resources into their hiring efforts for fear of wasting money. The thing is that if you don’t spend enough, you run the risk of attracting lesser quality candidates and hiring the wrong people.
So how do you walk the line? It’s not easy, but a good way to start is by understanding the pros and cons and nickel and diming your next candidate search.
Pro: you don’t waste resources
If you’re running on a really tight budget, then you’re forced to take a very strategic and measured approach to recruiting. Instead of having the luxury of using the best paid postings and undertaking attractive hiring campaigns, you’ll learn how to work the cheaper or free channels, such as the basic offerings on LinkedIn and Twitter. There’s no chance you’re going to use a ‘scatter-gun’ approach and waste money on things that don’t yield real results.
Con: you don’t reach the best candidates
Some job boards can be pretty expensive to post on, but not using them could be a mistake. There’s a reason why sites like Indeed.com are so popular: It’s where job seekers are looking and employers are posting. If all you’re doing is attracting a smaller pool of not-so-great candidates, you’ll wind up with people on your payroll who don’t really cut it.
Pro: your hiring efforts are streamlined and agile
With less money to spend, you won’t be wasting time on long, drawn-out recruitment processes. While the vast majority of big companies allow more applicants to complete the application even after they fail screening questions, budget-driven recruiters weed out unsuitable candidates from the get-go.
Con: you’ll pass over good candidates
Sometimes the best candidates aren’t stand-outs on paper. While cutting candidates who don’t exactly meet requirements at the first stage of recruitment makes sense, by not spending time and resources on so-called wildcards, you’ll miss hidden gems. Some people perform better in person, or have the right personal attributes and ability to learn, rather than experience. If you don’t check them out, you’ll never know if they’re your next dream hire or not.
Pro: you’ll focus on recruiting efforts that actually work
Less money to spend on recruiting means you really analyze which strategies work and which ones don’t. Is posting a paid advertisement more effective than developing a careers page for your company’s website? Is it better to send a representative to local colleges for recruitment, or make recruitment videos featuring your staff? A small budget forces you to consider the cost-benefit analysis closely and use your resources more wisely and with innovation.
Con: you might end up making bad hires
Research says it can cost up to $4,000 to make a new hire. This includes resources spent searching for candidates, interviewing and lost productivity when a role lies empty, so you want to fill the position as soon as possible. But rushing it means you’re more likely to hire the wrong person for the job. And that will wind up costing you a lot more in the end.
Getting the balance right
In the war for talent where small companies are competing with big brands, you need to use every tool in your arsenal to attract the best people possible. If you cheap out, you may miss out on getting the right people in the door that you need to help grow your business effectively. You don’t have to spend a fortune, but recruiting costs money and you need to be prepared to invest in it. If budget is a concern, then make sure you’re investing your dollars where they will have the biggest impact. When you know what works and what doesn’t, putting the money you do have in the right places becomes a lot easier.
How does your organization manage recruiting costs to get the best results?