How Cost Per Hire Is Killing Business – And It’s Not What You Think

How Cost Per Hire Is Killing Business – And It’s Not What You Think

Why is it that we obsess about metrics like cost per hire when the cost of not filling a job can literally kill an organization’s bottom line?


The Real Cost Per Hire

I was in a meeting with the CEO, CMO, Director of Recruiting, and key staffers at a Fortune 500 company. The discussion was on candidate flow and the difficulty they were having filling revenue-producing positions. As the company’s massive investment in equipment, bricks and mortar was lying idle, customers were passing them by.  

HR’s response to the talent shortage? They wouldn’t do anything to the recruiting strategy that would increase the company’s current $700 cost per hire by $50. 

Meanwhile, the CEO pointed out the cost of not filling a position, one position, was roughly $19,000 per month in lost revenue. When I heard there were about 1,000 open positions at the company, my jaw dropped.

HR was worried about saving $50 per hire while the opportunity cost per hire was $19,000 per month. The business was losing hundreds of millions in revenue because it wasn’t making hires.  But… HR was keeping that cost per hire number under $700.  So, save tens of dollars and not make millions.

Empty Seats Are Costing You

If your recruiting efforts aren’t keeping pace with your organization’s workforce needs, it may be time to gain a better understanding of what the cost of not making a hire really is. What is that empty seat costing you? What’s that empty mechanic bay costing you? That unfilled nursing slot? The missing restaurant manager? Or that empty hairstylist chair?

In conclusion, if you are in talent acquisition or HR, knowing the cost of not making a hire can make you a rock star to your CEO. When you consider the actual financial impact and lost opportunity, you may find a lot more budget and support for recruiting by framing the problem around the cost of not filling positions. The fact is, unfilled jobs are throttling the growth of most companies, and that’s probably the case at your company, too. 

CEOs and CFOs get it.

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If you are tired of lost hiring opportunities, let’s connect. I’d like to understand the issues your company is facing and how PivotCX can help. Let’s talk about your recruiting. 

3 Ways to Accelerate Recruiting

3 Ways to Accelerate Recruiting

 

 

 

 Do you require a full 10+ step job application before you engage with a candidate? If so, you may be missing many of the best candidates. Why?

No one wants to sign a prenuptial on the first date.

Here’s another way to look at it:

Would your sales department require a full credit application before you talk to a potential buyer?No, of course they wouldn’t. They would first present the product they’re selling and sell its benefits. 

Why is it that most companies require such long job applications first?

20 Years of Bad Habits

Companies are still using grossly long job applications because we’ve gotten used to a long-term employer’s market. We got used to posting a job and getting 100 or more applications. Inundated with such a large applicant pool, we biased our hiring processes to screen out everyone who wasn’t an exact match.  

Better Recruiting Habits

The recruiting landscape has changed drastically in the past years. The Bureau of Labor Statistics reported that in October 2021 there were only 0.7 job seekers per job opening. Now that there’s less than one available job seeker per open job, maybe it’s time to rethink how we engage with job seekers. Here are 3 things our most successful customers do:

1. Apply Faster

The fastest applications only need 3 fields: a name, a phone number, and an email address. It’s better to collect the bare minimum contact information to get the candidate talking as soon as possible with a recruiter rather than put them off with long form applications which should be reserved until after an actual job offer.

2. Engage Faster

Our most successful employers are responding to job seeker interest in less than 2-4 hours. A year ago, you could wait 2-4 days and still find quality candidates. If you want to get the best people, go even faster and respond in minutes.

3. Talk to Job Seekers

Have a human-to-human conversation with applicants as quickly as possible. If you are having people fill out long applications online and are only talking to the candidates you are interested in, your competition is eating your lunch. Most job seekers have basic questions they need answered to determine if they want to apply. Sometimes it is about benefits, sometimes it is about compensation, sometimes it is about requirements — most often it’s about something you don’t expect — and it takes a person to answer the question.

At PivotCX our candidate advocate team talks to every job seeker within minutes of every inquiry. Our team is answering job seeker questions, getting a complete profile and making sure there’s a good fit, and then referring candidates to our client companies who are then engaging with the applicants to complete the hiring process. 

Think Different

Times have changed. Jobs used to be scarce. Now applicants are. Regardless of how we got here, the new reality is there is less than one job seeker available for each open job in the US. 

It’s time to start treating job seekers like they are scarce — because they are.

Find out: PivotCX helps your company respond with a live person in seconds to candidate inquiries. 

    Want to learn more about how PivotCX can improve your applicant flow? Request a demo.

    PivotCX on the Converge Coffee Podcast: RevOps Methodology in Recruiting

    PivotCX on the Converge Coffee Podcast: RevOps Methodology in Recruiting

    Overview

    Mike Seidle joins Sean Sullivan of the Converge Coffee Podcast to go deeper into the experience of pivoting a company towards clients’ needs and finding success after COVID.

    Mike explains how the company focused in on key recruiting metrics. Mike shares insights on how PivotCX uses a revenue operations (rev ops) methodology to deliver the key metrics and overall scalability for their clients. Mike’s focused yet passionate tone shows how much he loves helping the company, clients, and partners succeed. He even gives some insight on messaging platforms and the progression of sales to revenue operations over the last 20 years.

    Links in this episode:

    LinkedIn: @IndyMike (Mike Seidle) 

    Converge Coffee podcast: Converge Coffee

    Human Interaction in Hiring! Podcast interview with Mike Seidle

    Human Interaction in Hiring! Podcast interview with Mike Seidle

    This is a discussion of the importance of the Human Interaction in Hiring with Traci Rubin, host of Bringing the Human back to Human Resources, and Mike Seidle, CTO of PivotCX.

    In this episode of Bringing the Human back to Human Resources, Mike Seidle speaks with Traci about how PivotCX is bringing the human element back to the candidate experience. Employers continue struggling to create a positive experience for job seekers. Complex multi-step applications, chatbots, and over-worked recruiters make it harder to reach out to job applicants quickly and personally. Since the job market is becoming much more competitive, talent has become the main concern for businesses of all sizes. Speed of response and keeping the human interaction in hiring are key elements of the candidate experience. Candidates who get responses quickly are more likely to follow through the screening process and get hired. 

    Links in this episode:

    Connect with Mike Seidle: https://www.linkedin.com/in/indymike/

    Connect with Traci Rubin: https://linktr.ee/HRTraci 

    Featured Image background by Dominika Roseclay
    Podcast: Creating Engaging Experiences in Recruiting

    Podcast: Creating Engaging Experiences in Recruiting

    Overview

    In this episode of Businesses are People Too! A Podcast, host  Lindsay Harle interviews PivotCX’s CTO, Mike Seidle, to explore the power of an engaging experience in recruiting…

    On this episode, we dive in and learn:

    • Why hiring is a C-Suite, not an HR issue
    • How companies should interact with potential hires
    • The reality and ramifications of the demographic shift
    • The importance of bringing along your younger employees up through the company
    • How to give employees opportunities to grow without them having to leave
    • Why businesses should be hiring for POTENTIAL rather than specifics of experience, skills, etc.
    • How to assess the potential of an individual
    • The power of HUMAN intelligence in hiring
    • What the most important thing a job seeker should be doing in an interview
    • One small thing businesses can do to start engaging their applicants
    • How to fill open positions effectively
    • The power of an engaging experience in recruiting
    • Mike’s answer to “What if…businesses realized that they are people too?” (35:09)

    Links in this episode:

    Website: www.pivotcx.io

    LinkedIn: @IndyMike (Mike Seidle)

     

    Website: www.thewriteharle.com; www.quirkylindsayharle.com

    LinkedIn: Lindsay Harle-Kadatz

    Featured Image background by Dominika Roseclay