Factors to Consider When Calculating Your Cost Per Hire
When starting the recruitment process determining how much exactly your cost per hire will be is an important factor but so is your quality of hire. The wrong hiring decisions will wind up costing your company even more. With the current state of economy it is important that you are able to take the time and effort to hire top talent that will add value to your company while doing so at an affordable cost. Calculating this cost will vary depending on the way you choose to approach it.
Some companies choose to have their in house HR department in total control of recruiting. They are in charge of taking care of every task in the process and in addition the company is faced with a number of costs associated with recruitment. Some of the important factors to take into consideration when calculating cost per hire with this approach are:
- · Job fairs, college recruitment, advertising, and job board posting and access costs.
- · Hardware that needs to be added in for candidate screening, from computers, to resume
search programs and phones - · The costs associated with marketing open positions
- · All training, on boarding and turnover expenses
- · Travel costs
- · Recruiters and managers salaries
HR departments are often faced with a heavy work load and the recruitment process demands a lot of invested time in order to find the best candidates for each position. In order to allow them to focus on their core responsibilities that will continue to keep the business moving forward, a company often chooses to outsource their recruiting. They do so through either a contingency or recruitment process outsourcing (RPO) agency. With a contingency recruiter they charge nothing until the position is filled but many find that this approach can be expensive for their company, costing anywhere from 15-30 percent of those hired salaries.
The companies who chose to partner with an RPO agency have found that they are able to get ahead of the competition using the specialists with the experience and the tools to find the best candidates to fill their positions. A 2009 study conducted by the Aberdeen Group found that 62 percent of the organizations that they surveyed who had used this outsourcing approach were able to significantly reduce their cost per hire while hiring valuable candidates for their company. RPO providers, such as Hire Velocity, have the ability to drive down recruiting costs for companies by as much as 50 percent. As an RPO agency Hire Velocity offers to do as much or as little of the recruitment process companies they partner with need. The Aberdeen Group study of roughly 200 companies also revealed that 77 percent of those who were using RPO were happy with the results and would recommend it to others. Outsourcing with an RPO agency provides results of hiring quality candidates that will add value to your company as well as have results that will significantly reduce cost per hire.
June’s job report shows highest unemployment rate this year
The Labor Department’s release today of the U.S job report displayed shocking numbers for jobs added in June. Economists had predicted a report for last month that should display strong results and had high hopes that the economy was heading in a positive direction. Unfortunately, the release of the report was disappointing proving to be just the opposite of what had been expected. In fact, data showed unemployment at 9.2%, the highest recorded this year.
According to the job report only 18,000 jobs were generated in June. This report shows the number to be dramatically below the previous report in May, displaying the addition of only 25,000 jobs. Not only did the data show less hiring it also highlighted major underemployment. Last month a large portion of those seeking jobs were forced to take part-time jobs and jobs below their skill level because they were unable to find full time work. Underemployment affected 8.6 million people in June, leaving those affected with not only cuts in average weekly hours but in their hourly wages as well. Due to these cuts paychecks were left smaller which is taking its toll on the economy. Consumers were left with less buying power affecting the ability to fuel the economy. There have been some signs of recent economic improvement though aside from June’s disappointing report. The recent decrease in gas prices give hope of future economic improvement in the second half of the year, but a strong boost in hiring is needed in order to keep up with the constantly growing population.
Censky, Annalyn . (2011). June jobs report: hiring slows, unemployment rises. CNNMoney, Retrieved from http://money.cnn.com/2011/07/08/news/economy/june_jobs_report_unemployment/?cnn=yes
New Jobs Found in Emerging Fields
According to the Bureau of Labor Statistics (BLS) in the upcoming years the latest growing job sectors will be coming from the IT, healthcare and financial services industries. Jobs in manufacturing and farming, according to a recent BLS report, have been making a rapid decline, while new jobs are emerging to fit around the consistently changing market.
New lines of work are being created to fit consumers’ lifestyles. By the year 2018, economists anticipate that over 1 million jobs will be added into the workforce. We are already seeing changes in hiring as technology advances. The title of a social media specialist, something that was previously non-existent, now plays a major role in running a successful business. Massage therapist and other jobs in areas that help to fulfill a healthier lifestyle rank among the top job fields with a wide variety of job opportunities in the medical field.
This shows positive signs for the recent graduates who will have an advantage with the latest knowledge in these emerging areas as they start their career. It’s also good news for anyone else looking to make a career change. Most of these new jobs will require only unique training for the position, as opposed to having to go back to school to work towards a particular degree.
“Looking for a growing job sector?try social media, accounting, or massage”. Associated Pres (2011) Web. June 2011 <http://www.boston.com/business/personalfinance/articles/2011/06/08/looking_for_
a_growing_job_sector_try_social_media_accounting_or_massage/>
May’s job report shows rise in unemployment
Filed under: Job Searching, Recruiting Update, Unemployment
The Labor Department’s release of the US job report this morning shocked many with its final numbers for May’s unemployment rate. Over the past month employers were hiring but at a slow rate. There were only 54,000 jobs this May in comparison to the 232,000 in April. Economists had predicted much higher numbers in jobs and were disappointed to see the unemployment rate rise from last month’s 9.0 percent to May’s 9.1 percent.
There has been much discussion as to why the report shows such low numbers. It’s believed that recent natural disasters have played a role, referencing the Japanese earthquake which effected jobs in the manufacturing industry as well as other major disasters here in the US. The numbers are also said to reflect a slowing economy and that budget cut backs as well as May’s high gas prices were a major cause of the decrease in jobs.
May’s report comes after three strong months of increasing employment and may possibly be something not to worry about. The economy and labor markets are still continuing to grow; they are just doing so at a much slower rate than had been predicted. Numbers in the report are also showing some positive signs as the numbers continue to show growth in payroll.
Isidore, C. (2011). May jobs report: hiring slows, unemployment rises. cnn money, Retrieved from http://money.cnn.com/2011/06/03/news/economy/may_jobs_report_unemployment/index.htm?hpt=hp_c1
Lone Star State Continues to hold top ranking by CEOs as Best State for Business
The results are from Chief Executive magazine’s annual survey and are based on a variety of factors from taxation and regulation, to work force quality and living environment. Hundreds of CEOs have ranked the best and worst states for business in 2011. Since 2005 Texas continues to hold the top spot as the best state to do business while California and New York remain on the bottom, ranking as the worst.
CEOs look to do business in areas based on a state’s attitudes and policies towards businesses which are essential to successful growth. Factors from the work ethic of the people to the schools in the area play important roles in their decision to start a business as well. Texas continues to rank high based on these factors as well as its labor market flexibility and low taxes. Over the last decade Texas has attracted 4.3 million people to the state and in the last year alone created over 250,000 jobs, attracting the largest amount of job seekers to their state then any other in the country.
A major quality that CEOs look for when entering into a state to do business is its flexibility in employment laws. The top ranking states possess qualities in allowing for company freedom in deciding employee terms and benefits. CEOs want to be able to hire the appropriate employee for the position and have found that most of the lower ranking states have implemented regulations that make this hard for their business.
Donlon, J P. “Best/Worst States for Business.” Chief Executive 3 May 2011: n. pag. Web. 16 May 2011. <http://chiefexecutive.net/best-worst-states-for-business>.
Companies Ramp Up Hiring
As the economy continues to improve, more companies are ramping up their hiring efforts. Economists predict that around 200,000 jobs a month will be added throughout the year. Manufacturing has been a leading sector in the past months, and we’re seeing many major well-known companies expanding and looking to hire hundreds of positions.
The decrease in unemployment will allow for more of consumer’s money to be spent in the economy thus generating even more hiring. The new income for consumers is important as we see gas prices continually rising and large debts incurred during the recession that need to be paid off. Economists hope that gas prices will level off in the coming months to allow for consumers to have extra spending money to fuel the economy and continue to increase hiring.
Bartash, Jeffry. “Jobs report to shed light on U.S. economy .” MarketWatch 1 May 2011: n. pag. Web. 2 May 2011. http://www.marketwatch.com/story/jobs-report-to-shed-light-on-us-economy-2011-05-01?reflink=MW_news_stmp.
Crutsinger, Martin. “Hiring likely to boost spending despite gas prices.” Associated Press 29 April 2011: n. pag. Web. 2 May 2011. <http://www.businessweek.com/ap/financialnews/D9MTI2104.htm.