The Price of Hiring Great Talent

The Best Things Are Not Free

Many of us in the recruiting industry are confused. We hear from every employer and hiring manager, they have a strong need to hire best talent. We have a new hire attrition problem. It is taking us too long to get our open jobs filled. The quality of our new hires are questionable. The list goes on. However, when contemplating solutions to the stated problem there appears to be a heavy focus on the cost to fix it without adequately considering the positive financial and performance impact which could be realized by the business if the problem were to go away.  It is the equivalent of choosing whether or not to change the oil in your car based upon the cost of oil rather than on the long-term life of the engine and vehicle. They forget that it is the cost of doing business.   

In terms of hiring great talent, simply posting jobs on the internet, sending inmail messages and praying the right candidates respond is not a recipe for success. Many of the best candidates are not looking to make a career change. They are not actively searching for new opportunities or checking the status of their LinkedIn profile. They may not be sitting in a candidate database. They need to be identified, rooted out and courted for the opportunity. Yes, I mean courted. Don’t forget, great talent have career options. They are not standing in line waiting to go to work for you. These are the types of people you really want and need in order to continue to drive your business forward.  And, if you are partnering with a 3rd party to achieve your hiring objectives, be sure they are aligned with your objectives and not just chasing a fee. 

Hiring great talent requires employers to change their thought process; to view recruiting differently. Ongoing investments are required beyond job postings and recruiting systems to get the job done.  It takes people to court people, whether they are a direct part of your team or an extension of your organization by way of a strategic partnership with a recruitment provider.  Systems can certainly help drive efficiencies, but when it comes to identifying and securing great talent one cannot lose sight of the human element.  And, unfortunately, the human element requires time.  Time, persistence and relational savviness of skilled talent acquisition professionals and hiring managers.  I learned a long time ago from my mother-in-law, the best things are not free. They come at a price. Doing more of the same will continue to net the same result, or potentially even fewer results than days of old as the employment market continues to tighten.

My immediate question, do you (employers) truly know your cost associated with recruiting? I hear numbers all the time, but frankly, many are grossly understated.  If the quoted number is accurate, it might explain your struggles in hiring great talent. Hiring great talent is not free. One needs to ask, how are we calculating the cost associated with the job being vacant? Are we losing out on revenue because jobs remain unfilled? Is the quality of the product and/or the service being impacted adversely? Is it causing overtime and overtime expense? Is it resulting in the use of temporary staff and temporary staff expense? Is it causing employee attrition? Is it impacting employee attitudes and morale? Is it hurting our image/brand in the marketplace? Has it placed any of our customers at risk? All of these have an associated cost beyond just direct recruiting expense and generally are not considered when looking at the total cost of recruitment.

The next question, can you calculate a recruiting ROI? While more difficult to answer, you should be able to work with your finance team and business partners to gain a sense of the value of great talent to the organization. As an example, a healthcare organization I am very familiar with was able to calculate the increased revenue and gross margin dollars realized as a result of filling billable roles in a timely fashion.  Doing so allowed them to better capitalize on revenue opportunity while reducing the utilization of expensive temporary staff and overtime pay.  The strategic investment in a robust and reliable recruitment function resulted in a $.02 earnings per share for this multi-billion-dollar firm. The solution to their problem was not free, but the value felt by the organization and shareholders was significant. It more than paid for their talent acquisition investment. The payback measured in time was less than 4 months.

Hiring great talent only works if you approach recruiting differently. Know your real cost of recruitment, which doesn’t just include advertising expense and staff cost, but also includes the cost to the organization of the vacancy itself. Focus on building a robust and nimble recruitment function resourced with the right tools and people.  If you do engage a third party partner, don’t start the conversation by simply asking about their fees and then ending the conversation there. Rather, start by asking how together we are going to fill our open jobs with best fit talent. What investments are they willing to make? How do they plan to scale their resources based on our ever-changing hiring requirements? Recognize that their third party fees may look different, but in total not necessarily more and maybe even less. And yes, that change in fee structure is okay. You need to continue to recognize that hiring great talent is not free and there will be some fixed expense. However, if done correctly, there will be a positive ROI; you will hire great talent; and you will gain a seat at the executive leadership table.