Cost of recruitment: Part 2 - "7.8 hires per year"

Looking at 2021 through a recruitment strategy perspective? In this article I will give you some thoughts. Actually, you will receive a (slightly simplified - yet useful) framework for what to choose.

In "Part 1" I drew the conclusion: if you hire an in-house recruitment specialist, a Talent Acquisition Manager, a Recruiter - it would need to complete at least 7.8 hires a year in order to make use of the annual pay check.

But before moving too fast - let us back up. What alternatives do you actually have as a company, when it comes to recruitment strategy? And more importantly - what to choose?

You would of course be able to use a mix of the alternatives listed below, as well as neither of them and still be able to experience a successful recruitment strategy - but in order to generalize and simplify:

1. Hire recruiter(s) - successful unicorns like Spotify and Netflix most likely helped increase the pace of this development. They may have been, and most probably still are - in need of this strategy due to their pace of growth. The assumption that internal competence is better at assessing cultural & competence fit is clear as well as the cost, given the assumptions made in part 1.

So: if you can make that business case, this alternative is probably your best choice. But in order to compare it - and even answer if it’s reasonable: is it possible to recruit 7.8 people per year?

SweSale argues that it will take at least 100 hours to complete one in-house hire. Poolia agrees, but expands the span to 50-150. And in this particular case - I will choose to believe them.

Since the number of working hours per year is 1474, you as a Recruiter would be able to hire almost 15 people per year. If you do nothing but hiring. In other words: if you never spend time on other projects, like employer branding, stepping in when the HR Generalist is off due to vacation and planning the yearly Christmas party.

2. Use external recruitment agencies - there is a lot of help to get, recruitment agencies increasing in numbers with 30% between 2014 and 2018, and these are clearly providing its clients with value adding services - since the majority of these companies actually have positive margins.

The pricing is obvious. To be clear: given our assumptions, if you are planning on hiring less than 7.8 employees during a year, you will be better off with an external agency - than with an in-house recruiter.

However, there are a couple of question marks to address:

How to choose which one to go with?

Go with one exclusively, or several in parallel?

Local or international?

Answers to the questions above is more complicated than I intend to cover in this short article - but *hint* I may give you a shortcut under alternative 4.

3. Rely on your employer branding - from a cost perspective in the best of worlds you wouldn’t need to go for either of alternative 1 or 2. In the best of worlds you would probably receive enough qualified candidates just by publishing an ad on Linkedin? You may even already see results from the long term employer branding projects you have been working on for such a while? If this is the case - great. Focus on your internal processes and candidate experience.

If not - this is not unusual. MRI reports that 80% of employers claim that their biggest problem is receiving enough qualified candidates in their recruitment processes. How to change this - and improve your employer branding is for someone else to help you out with - but if you need qualified candidates today - go by alternative 1 or 2.

What am I saying here?

"So what about the 4th alternative then?"

During the last couple of years several HR/Recruitment-startups occurred in order to disrupt the industry and increase the number of alternatives when it comes to recruitment strategy. Demando, WeTal, Intro & 10xRecruit are all Stockholm-based startups on this mission - even if the paths may vary.

Sekando aims at mainly helping customers in the segment of hiring less than 7.8 people per year, and is interested in setting their own price, and increase the supply by reaching more than one agency through one digital platform. We believe that we improve the odds by increasing the supply. Now: go through the alternatives, compare it to your plan for 2021 - and choose your path.