Spending Smartly in a Slowing Economy

With the economy slowing and unemployment rates rising, now is the time to review your costs as a recruitment department in order to keep your company afloat during the dry times. Staying “under the radar” from the CFO and CEO when it comes to overhead costs will help keep your department intact and in better shape to bounce back and react once the economy turns positive again. Creating a spending-savvy department is a team effort. The big difficulty with reviewing and cutting costs in a recruitment department is that the decision-makers in most instances (VP/Director) are not the users (recruiters), so they usually have no idea of what the users find valuable or what is working. In many cases, the decision-makers are unaware of what the users are spending on, particularly in a decentralized recruiting department. If you are one of those rare organizations who have kept good metrics, cutting excess fat from your department in terms of vendor costs should be a breeze. This article is probably not for you. If you are one of the other 95% of organizations who have not been able to develop detailed metrics, cutting the fat will be a far more difficult process. But here are some tips to get your department through this transition period:

Work as a team to map your current processes. Each recruiter should be able to give you a general idea of their recruiting process for various levels of positions. Ask the question, at what point is the recruiter going straight to more “high cost” recruiting methods vs. trying “low cost” methods first? This is also a good time to map out the time factor going into each vendor product or service. Time is money, so if you are considering buying an Applicant Tracking System that involves extensive training and administrative time, think twice.

Use them or lose them. How many organizations have purchased a subscription to a database that none of its recruiters are using? How many organizations regularly auto-post to career sites that rarely yield quality results? How many conferences did you attend that you did not learn from? What software have you purchased that nobody uses? Are you paying expensive resume scanning fees in order to put old (2 weeks+) resumes in your applicant tracking system? If you are not getting extreme value from your products, services or vendors, do not use them! By mapping out your processes, you will be better aware of what is being used and what is “sitting.” All of your resume subscription vendors should be able to show you the activity your recruiters are putting into searching their database so don’t be a afraid to ask for this helpful information.
Create a multi-step recruitment process that will justify costs. Work with your recruiters to map out sourcing methods by cost that they should use for various levels of positions. Okay, so maybe you are uncomfortable with posting a high-level position, this doesn’t mean it needs to go straight to an Executive Search company. Try searching the Internet for those high-level folks first.
Trim redundancy and “time wasting” areas. Unbeknownst to the recruiting team, you may have quite a bit of redundancy in each process that you may be able to eliminate. You will see a lot of this in the way of postings. Coordinate your posting and advertising activity to eliminate posting similar positions at the same time. There are so many “time wasters” in a recruiter’s day that it prevents them from doing what is most important. “Time Wasters” are junk email, vendor calls, applicant “what’s my status” calls and employees who like to come by HR and chitchat. Again, time is money and at this stage of the game the department needs to run like a well-oiled machine.
Avoid costs that are difficult to measure. General branding, ad marketing, job fairs and banner ads would fall under areas that are difficult to measure because the cost is high and hires are not inevitable. Typically, I would not recommend this, because so much of the value of “marketing” is immeasurable. However, when you have to justify the costs of an “overhead” department because your job is on the line, this is a good area to start cutting costs.
Keep your eyes on the “days to fill.” When the economy slows it should be easier (less expensive and less time-consuming) to fill your positions, since there are more job seekers available. If you are still not filling positions within 30 days, go back and map your processes again to find out where the hold ups are. Recruiters fearing for their jobs may inadvertently “hold on” to their requisitions to justify their positions.

By proactively reviewing your methods and costs you will be avoiding any haphazard, reactive cost cutting in the future. Whether your company is doing well or experiencing some difficulty in the slowing economy, the time to spend intelligently is now. <*SPONSORMESSAGE*>