Recruitment Cost Savings
HOW SKILLS MAPPING CAN REDUCE RECRUITMENT COST
Every job in your organization has its own set of required skills – hard and soft skills. Do you know in real-time what skills are needed for each job? It’s likely you don’t. Every time you are recruiting someone you are reinventing the wheel. Rebuilding a job description, rebuilding an unbiased framework to judge the candidates skills against the open position… You are wasting time. Skills mapping enables you to have an instant matching rate between candidates applying and the job you are recruiting for. No more guessing, no more wasting time reevaluating the skills needed for a position. A proper skills mapping does it for you.
The average cost-per-hire is $4,129, while the average time it takes to fill a given position is 42 days, according to the Society for Human Resource Management’s (SHRM’s) new Human Capital Benchmarking Report. This recruitment cost covers the cost of filling a newly created position, NOT a position left by employee turnover.
This cost covers:
- Cost of hiring a new person (advertising, interviewing, screening, hiring)
- Cost of onboarding a new person (training, management time)
- Training cost (over 2-3 years you likely invest 10-20% of an employee’s salary or more in training, that is gone)
Adding the training cost and the cost of opportunity of not having that position filled – we rounded the average cost-per-hire to €5000.
To estimate the average recruitment ratio for newly created positions across industries we looked at different reports referenced below (BLS, LinkedIn, World Economic Forum…). We compiled their data. The average recruitment ratio for newly created positions across industries for the year 2018 is 1% of headcount. It varies by industries – we accounted for that variability in our industry coefficients.
We estimate that proper skills mapping saves you at a lot of that recruitment cost.