Consider your organizational needs for a moment. Think about every vacant position in your company, and then think about every seat that has someone sitting in it presently. Now, think about your hiring strategy. Are you thinking about just the open seats in your workforce, or are you considering the seats that may be opening up in the near and distant future as well?
There are many exhaustive challenges when it comes to finding and retaining talent, and along with those challenges comes investments. Investing in your talent acquisition efforts can be a costly endeavor, and when things look good for your organization – seats are filled and people are working – there is a strong temptation to cut back on your talent acquisition budget until the time comes to find new talent.
However, a recent study from Bersin by Deloitte has shown that this effort may save you short term money, but is costlier in the long run. In the study, Bersin examined two types of organizations: reactive recruiting organizations (ones that recruit when needed) and optimized talent acquisition organizations (organizations that are always recruiting). What Bersin found was that reactive recruiting organizations spend an average of $3,258 for every new hire; half of what optimized talent acquisitions organizations spend, which is at $6,465 per hire. But the short term savings does not make up for the long term implications.
Specifically, Bersin found that retention and lead times are both much better for organizations that invest in year round recruiting. Organizations that are considered optimized talent acquisition have a 40% lower turnover rate than their money-saving, reactive recruiting counterparts. Furthermore, the time to fill a vacancy is 20% faster for organizations that invest in recruiting year round, clocking in at 44 days compared to a reactive organization’s 55.
What does this mean? Despite spending more money in the short term, an optimized organization is strategically better off because they’re able to retain talent longer, which means they’re not going to be as concerned about having to find new talent as their reactive counterpart. Additionally, they’re going to end up saving money by not having to continually invest in training and education for their new hires, meaning that even though their new hires will cost them more in the short term, they’re getting more value out of their new hire. Along with that concept, the shorter time frame to fill a vacancy means the optimized organization is getting an earlier return on the cost of the new hire. So even though more money is spent early on, the retention, savings on training, and quicker return on investing in someone makes an optimized organization much stronger in recruiting.
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Topics: Talent Selection Ideas