If you’ve just set out on the journey to hire a new employee, you may face some hard truths. Hiring is extremely complex and it takes a lot of skills, patience, time and money to find the right person to fill a position.
According to the U.S. Bureau of Labor Statistics, total employee quits have risen every year since 2010 and the number of employees who left their jobs in 2018 exceed 40 million. What’s more, current ADP studies state that 17% of today’s workforce are actively job hunting and 46% are passively looking.
Turnover is a harsh reality for many employees, and while combating unnecessary turnover should still remain a priority, companies also need to be prepared with an efficient, highly-optimized recruiting capability. Talent acquisition professionals are tasked with bringing in the employees needed to execute on their company’s goals, and to maintain staffing levels needed to fulfill the needs of the business, so to that end, a thoughtful hiring strategy is a must.
By utilizing the Recruiting Cost Ratio (RCR) a company can calculate the amount of money they are spending to complete all the activities around finding, attracting and hiring new employees into their organization. This formula is critical for all companies to understand the efficiency of their talent acquisition process and enables them to better plan/prepare for future hiring projections. Today’s data suggests that the national benchmark for the Recruiting Cost Ratios is 13.4%.
Best practices suggest calculating your cost to hire at least once per year, to keep an eye on any sudden leaps in spending. However, when it comes to that spending, how much is too much? Utilize this calculator to determine if your recruiting practices are within a healthy range, or if there is room for optimization.
Hiring new employees can be a big challenge for any employer. Whether it is identifying the rewards packages that are associated with recruiting top talent or with maintaining current employees, or simply finding the right person, the hiring process can be a challenge from day one. There are plenty of factors to consider when it comes to calculating the true cost of employment. Ensure you understand your costs of hiring so that you can better manage your employee expense base effectively and efficiently.
To learn more about how to incorporate key strategies into your hiring practice, contact your OneDigital Consultant today.