In theory, Artificial Intelligence (A.I.) gives companies the ability to pass human recruiting tasks on to automated tools. Not only does this delegate the prescreening process to a robot, it can also prevent would-be candidates from even becoming applicants. This...
The Applicant Manager Blog
Subscribe to Email Updates
How Better Recruiting Reduces Turnover and Cost Per Hire
Recruiting has changed. The advent of so many startups, a new generation of workers, social media and technology, have all changed the game. Not only has the way we go about crafting job descriptions and posting roles changed, but even the start of the recruiting phase now begins well before a position is actually open. With everything that is evolving within talent acquisition, what hasn’t changed is that better recruiting leads to lower turnover and a lower cost per hire.
Consequences of a Bad Hire – Beyond Turnover Cost
This recent study shows the average cost per hire to be at $4,000. But what is the turnover cost per hire if they’re bad hires? Turnover costs are estimated to be one-third of a new hire’s annual salary or more in order to replace them. However, the consequences of making a bad hire go beyond this. There are other costs as well, such as reduced morale among employees, disruption to a department, slower production, an increased workload, and depending on their position, the potential of lost sales or customers.
There are a whole host of factors that contribute to employee turnover; boredom, low pay, lack of recognition, limited advancement opportunities, dissatisfaction with management. However, one of the largest reasons for high turnover, 80% according to a statistic by The Harvard Business Review, is due to making a poor hiring decision in the first place.
How do employers avoid costly hiring mistakes? The following are some best practices to incorporate into a high performance recruiting strategy.
Recruit Top Talent Before You Have a Position to Fill
Frequently mentioned for their unorthodox business practices, Zappos has again gone off course with another standard business practice. Rath