# 8.6 Costs of Recruitment

## Costs of Recruitment

Part of recruitment planning includes budgeting the cost of finding applicants. For example, let’s say you have three positions you need to fill, with one being a temporary hire. You have determined your advertising costs will be $400, and your temporary agency costs will be approximately$700 for the month. You expect at least one of the two positions will be recruited as a referral, so you will pay a referral bonus of \$500.

Here is how you can calculate the cost of recruitment for the month:

cost per hire = advertising costs + recruiter costs + referral costs + social media costs + event costs.

$\400 + \700 + \500 = \frac{\1600}{3} = \533 \text{ recruitment cost per hire}$

In addition, when we look at how effective our recruiting methods are, we can look at a figure called the yield ratio. A yield ratio is the percentage of applicants from one source who make it to the next stage in the selection process (e.g., they get an interview). For example, if you received two hundred résumés from a professional organization ad you placed, and fifty-two of those make it to the interview state, this means a 26 percent yield (52/200). By using these calculations, we can determine the best place to recruit for a particular position. Note, too, that some yield ratios may vary for particular jobs, and a higher yield ratio must also consider the cost of that method, too. For an entry-level job, campus recruiting may yield a better ratio than, say, a corporate recruiter, but the corporate recruiter may have higher cost per hires.

## Five Ways of Hiring High-Impact Sales Professionals

1. Asking the right questions: Who is a successful salesperson for you?
2. Clarity on defining the job role backed by skill analysis
3. Using psychometric assessments to test talent potential
4. Investing in the right assessment tools unique to your sales strategy
5. Combining assessment scores with structured interviews

### 1. Asking the right questions: Who is a successful salesperson for you?

A successful salesperson comes with product and customer knowledge and is driven to thrive in today’s competitive economy by seeking out business opportunities and continuously learning and unlearning. There are four key traits that set them apart when it comes to closing deals and strengthening the sales culture: interpersonal skills, passion for the role, emotional intelligence and resilience. Organizations today need to add these traits to their list before setting out on their hiring process, as this will ensure that they recruit more strategically and will empower them to recognize the critical people skill sets in their talent pipeline. As a result, they will be able to hire faster and better, keeping the unique organizational vision in mind.

### 2. Clarity on defining the job role backed by skill analysis

This is a follow-up to the earlier strategy but is tied to the message we give our candidates. We all know that job descriptions (JD) are integral to inviting the desired candidates, and we can only write that sharp JD by having complete clarity beforehand on the skill sets we seek and the assigned responsibilities. So as much as it’s about you outlining why this role adds value to the growth strategy, it also enables the potential hire to understand their purpose in the organization. This is key to bringing talent on board.

What recruiters need to zero in on today is potential. Corporate vision and values and defining hard and soft skills are all important, but the role’s purpose and short plus long-term evolution must be communicated. If you want your talent to succeed, you must tell them why and how their skills serve the company.

### 3. Using psychometric assessments to test talent potential

Coming back to the importance of potential, psychometric assessments are known to be a valuable source of objective data which considerably increases your chances of making the ‘right decisions’ while predicting a candidate’s potential and performance in relation to what defines the success of the role. Most importantly, it ensures a fairer and more reliable recruitment process by tackling unconscious biases such as affinity and confirmation bias. Additionally, reports have shown that investments in psychometrics help save on recruitment costs by ensuring that you zero in on the right candidates to improve employee retention. After all, it’s not only about the performance of the individual but also how they will thrive in your unique working environment, the value they will bring, and the opportunities they will explore.

### 4. Investing in the right assessment tools unique to your sales strategy

While psychometric assessments will overall definitely accelerate the recruitment process and help deliver the desired results, it is also essential that leaders and recruiters strategically pick up the right assessment tools. Businesses will reap positive results only when intelligent investments are made, so tools must be handpicked to measure specific skill sets in line with the JDs. For instance, if you’re interested in specific sales skills (like combativeness, affirmation, relationship skills, strategic approach, etc.), a behavioural assessment specifically designed for salespeople, like the SALES PROFILE-R, that includes these aspects will be more predictive than a generic assessment.

Along with knowing your objectives and purpose, budgets and resources have to be factored in, and organizations need to ensure that the chosen assessment tool is tested for reliability, and validity, is as bias-free as possible and uses the latest techniques in psychometrics.

### 5. Combining assessment scores with structured interviews

The final and deciding stage of any recruitment process comes down to interviews. Having received the candidate assessment scores, the next step is to find evidence of these traits through a structured interview plan with pre-determined questions to avoid bias and ensure consistency in the recruitment process. The assessment results can serve as a discussion point during the interview to tap into the desired skill sets. For example, behavioural/situational questions on negotiation and communication skills can enable you to understand the candidate’s outlook on these skills and also helps in aligning it to the assessment scores to see if there is a coherence between the two.

Studies have shown that structured interviews are twice as effective in predicting job performance and help to reduce confirmation bias. Therefore, using it with the right tools, such as psychometrics, will enable a multi-criteria approach in recruitment that ensures bias-free, strategic and reliable decision-making in giving out the final offer letters.