Cultivating an attractive recruitment brand does more for your organization than keeping your candidate pipeline stocked with high-quality talent—it can lower your talent acquisition costs, increase productivity, and make a significant contribution to your company’s bottom line.
Reduces cost per hire
The Society for Human Resource Management’s (SHRM) 2016 Human Capital Benchmarking Report calculates the average cost to hire a new employee to be $4,129. When high-potential candidates proactively join your talent pipeline as a result of your recruitment brand, the amount of sourcing resources your team requires diminishes. That means less time and budget spent on job board fees, social media ads, sourcing out-of-town candidates, and dealing with costs associated with position vacancies.
If your recruitment brand is not as strong as it could be, you need to focus on creating useful and interesting content that generates trust and builds relationships. Your colleagues in the marketing department might describe this kind of activity as “inbound recruiting”.
Increased Revenue Through High-Quality Hire
According to the Brandon Hall Group’s 2015 “The True Cost of a Bad Hire” report, organizations with strong recruiting brands (described as those who provide a positive candidate experience) are three times more likely to make quality hires.
Why does that matter? Because making high-quality hires has an enormous impact on your company’s revenue. Top talent just performs better. Research published in the journal Personnel Psychology finds that 10% of an organization’s productivity comes from its top 1% of employees, and 26% of its output can be credited to the top 5% of its workforce. In other words, top talent produces four times as much as the average employee.
In some organizations, the contributions of top performers can be even more pronounced. Google, for example, has determined that its most exceptional employees are as much as 300 times more productive and capable of making a business impact than its average employees. For an organization where the average employee generates $1 million in annual revenue, that means making a high-quality hire can result in as much as $300 million in additional revenue.
To attract the best and brightest to your recruitment brand, be sure to highlight your accomplishments and share stories of employee success through your blog and social media channels, and don’t forget to make the overall candidate experience—which includes everything from job descriptions and phone screens to interviews and feedback—as thoughtful and positive as possible.
Increases Competitive Advantage
Creating a healthy recruitment brand can also increase your ability to lure top talent away from competitors by reducing the size of the compensation packages you’d have to offer to get them on board. According to research from the Corporate Leadership Council, a positive perception of the recruitment brand—something the research labels “employment value proposition” or “EVP”—you cultivate in your recruiting efforts can cut new-hire compensation premiums in half. Companies with unattractive EVPs require a 21% premium to attract candidates while companies with strong EVPs only require a premium of 11%.
While your organization may not be looking to tinker with its overall compensation strategy, you should know that a strong recruitment brand does have a measurable impact on the salaries candidates are willing to consider.
Remember, your recruitment brand encompasses everything you have to offer, so make sure your content channels are filled with compelling stories about what current employees consider to be your company’s best features.
Increases Turnover-Related Expenses
The costs associated with employee turnover are considerable. According to the Work Institute’s 2017 Retention Report, it can cost as much as 33% of a departing employee’s salary to find a suitable replacement, and a study by the Center for American Progress finds that replacing employees in highly paid jobs can cost a percentage of salary as high as 213%.
So what does that mean in dollars? According to the US Bureau of Labor Statistics, the median salary for a US worker is $45,000, which means the average cost of employee turnover amounts to $15,000 per person leaving your organization. And that’s just the average; replacing highly compensated and hard-to-source employees will cost much more.
Having a strong recruitment brand won’t lower the expenses of employee turnover—the costs you’ll absorb for productivity losses while you recruit, onboard and train replacement hires remain constant—but it can cut down your turnover rate by helping you attract and retain high quality candidates.