Believe it or not, numbers and data play a significant role in human resources. This is particularly true when it comes to hiring. After all, it’s not just about who you’re hiring; it’s about streamlining the process and putting checks in place to ensure you’re hiring the right person.
To get the best possible results, you must know and understand the numbers that play into your hiring strategy. Here’s the data you should be collecting and analyzing to help streamline your hiring process.
It’s crucial that hiring managers understand seasonal fluctuations in a business and hire accordingly. This means being able to pull numbers from previous years or making industry connections in a new business. Are there times of the day, week or year when you’ll need more staff on hand? For example, during the audit season in the accounting department of a large corporation or the holidays in a retail store.
Using a smart scheduling app like Humanity and taking the time to acknowledge and understand fluctuations in business will help you find the right amount of staff to keep your business running optimally. It will not only prevent potential staff shortages, but it will also help you prevent staff overages. Knowing that your workload increases by 29% in the holiday season will allow you to hire a temporary solution, rather than a permanent employee who will have nothing to do come January.
Cost of a Recruiter
Many businesses choose to work with a recruiter to reduce the time to hire (which we’ll discuss in the next section) or find a specialized individual to help the organization. To be able to assess the opportunity cost or return on investment of working with a recruiter, HR needs to understand the different numbers associated with their services.
A retained recruiter will charge a pre-negotiated rate for their services, which may be a flat rate for the duration of the recruiting process or have some fluctuation depending on the position they’re trying to fill. A contingency recruiter only collects payment when a candidate is hired. This could be a percentage of the candidate’s annual salary or a flat fee.
Time to Hire
Another important number to know when hiring is the time it takes to hire or the time a position remains open. Having a vacancy means that not everything is being handled as effectively as it should. This results in a decrease in productivity due to the lack of adequate work, as well as the impact on remaining employees who have additional responsibilities.
Having an open position can also cost you business, as it could cause delays and gaps in your sales order processing and ongoing innovation projects. Consider the idea that an employee generates the revenue to justify their annual salary. So, if an employee makes $50,000 annually to pay for the work they do, it works out to about 250 working days when vacation is considered. Thus, the employee is worth $200 a day. If that employee leaves and it takes four weeks to fill the position, the vacancy cost $4000. That’s not including the fees associated with hiring.
There are a lot of costs associated with hiring, even if you manage the process internally rather than using an external recruiter. Posting a job on job boards costs money. When you calculate the time your human resources department and hiring manager spends on crafting a job posting, pre-screening candidates, contacting eligible candidates for interviews, conducting the interviews, and processing paperwork, it adds up quickly.
You must also consider the opportunity cost of having your people focus on this task. If the manager of your marketing department is focused on finding a new assistant rather than being devoted to their projects, this will result in delays that slow a new product’s time to market. There are a lot of hidden costs associated with hiring.
Avoid a Bad Hire
Finally, a bad hire can cost a company double what a successful hire costs. That’s why it’s essential that businesses know their numbers in hiring and create an effective hiring strategy to streamline the process.