The difference between a successful business and a struggling one lies solely in the ROI. On paper, it sounds really simple. Just maximize your revenue so that the money you get back is more than the money you must put in. Easy, right? Well, it’s not that simple. You have to minimize costs in a variety of different aspects of the business, and one of those is hiring.
The hiring process isn’t just extremely time-consuming. The wrong decisions can lead to bad employees, which, in turn, end up costing you a lot in revenue as well. This is where executive placement companies come in. Professionals that have experience in the hiring process can help minimize the overall costs of hiring a new employee. However, to understand how they’re able to do that, we first have to understand the cost of new hires.
How Much Does a New Employee Cost?
So, upfront, hiring an employee might not cost that much. But, when you consider the long-term costs of a new employee, this number is approximately $4,129, according to the Society for Human Resource Management. This number is a result of the following factors.
Employee on-boarding and training
Bad performance due to a transitional phase
Possible costs for relocation
Advertisement costs for hiring a new employee
Loss of clients due to subpar service
The four grand suggested by the SHRM is only the average number. This cost increases depending on how ‘executive’ the position is. If you’re hiring for an executive position like CEO, COO, CTO, etc., this cost goes up to tens of thousands of dollars.
How Does an Executive Recruitment Company Lower the Costs?
Minimize Hiring Time
The same research from the Society for Human Resource Management also suggests that it takes approximately 42 days to fill a position. That’s much more time than any company would want to spend on hiring a new employee. This is where a recruitment company can help. With their vast network of candidates, these businesses are able to find and recruit candidates for your job position within a matter of days.
Hiring the Right Candidate
Every business has a specific set of skills that they’re looking for in a candidate. If you’re trying to find a content writer, this doesn’t necessarily mean that any content writer will be able to do the job. Maybe, your business requires content writers with some WordPress experience, or maybe you’re looking for someone that has expertise in creative work like poems. In such cases, hiring a regular content writer isn’t good enough. A recruitment company can sift through the potential candidates and search candidates that have the relevant skills your business is looking for, thus reducing the time required for employee on-boarding.
Avoiding Relocation Costs
An executive placement company isn’t just concerned with hiring the right employee. On a lot of different occasions, the right employee may be in the other corner of the country. You’ll have to pay for relocation costs and might even need to offer accommodation costs for a while. So, a recruitment company, with their vast networks, can help you find an employee near your offices so you can avoid this cost as well.
An executive recruitment company is a profitable investment for any company. It may cost more upfront but, it is a cost and time-efficient solution in the long run. So, if you have a position that you just can’t fill, contacting a recruitment agency should definitely be on your to-do list.