All of you seasoned HR professionals out there surely know about the common mistakes that can come up in the recruiting process. In addition, you know how important it can be to utilize a reliable, user-friendly applicant tracking system (ATS) to help conquer challenges—especially the ones that might come up unexpectedly. That being said, can you remember when the last time was that you walked yourself through the real benefits of your meticulous approach to examining your recruiting process? Maybe it has been a long time, but we can tell you that it is something you should be reviewing with regularity. As it turns out, there are some very real direct and indirect costs that can come from having poor recruitment practices—or less than ideal applicant tracking software—and they may be even higher than you realize.
What is the difference between a direct and indirect cost, you ask? It is important to know, in any industry, so here is a quick refresher:
- Direct cost: The measurable fiscal impact of a decision. The direct cost of a recruiting program is the sum of the work hours, advertising costs, website optimization, and other concrete dollars spent (such as those you use to bring talent to your door). Ideally, the quality of the employees you hire offsets the direct cost of your recruiting strategy.
- Indirect cost: The projected or undefined impact of a decision—or lack thereof. Cost avoidance (or the way an action can prevent unforeseen expenses or poor performance) is another way of describing the indirect costs.
In short, direct costs are what you can measure and see while indirect costs are the factors that are harder to quantify precisely. Now that we are refreshed on the definitions, we can look at some poor recruitment practices and see the direct and indirect outcomes on our organizations.
- Failure to optimize your web page(s)
- Allowing any part of your web page to remain invisible to search engines will undoubtedly result in a failure to attract the talent you need. As a result, your direct costs could include additional spending on increased advertising elsewhere and more time with an open position. Your indirect costs will reflect the potential opportunities lost—missing out on that one applicant who would have taken your team to the next level or taking a hit to your reputation as qualified, diverse candidates pass over your organization.
- Bypassing a pre-screen questionnaire
- As a way to save yourself some time and effort, you might be tempted to avoid the pre-screen questions in favor of maximizing the overall number of candidates you bring in. However, not only does this defeat the purpose of the pre-screen—to narrow the pool of job seekers based on your needs—it costs you more in the long-term. Direct costs here are on your organization’s side where you spend time sorting through applications you cannot use and then also can be on both sides-the organization’s and job seeker’s-where there is an interview process with someone who potentially would have been screened out by the questions. Indirect costs for this poor recruitment practice are to the organization’s reputation and its ability to attract the highest caliber of job seeker because eminently qualified applicants who feel they are overqualified based on the listed requirements will be disappointed by the inefficiency of the process.
- Ignoring the ATS
- All software platforms will take resources (in other words, cost your organization effort and money) to implement initially. However, with the right strategy it will improve that organization’s bottom line and the recruitment process all at once. Those organizations that avoid electronic applicant tracking systems lose out by paying more for paper and time spent sifting through applications. In addition, we have found that their recordkeeping efforts suffer, and their affirmative action plans are a reflection of those efforts. The indirect costs that can be attributed to this poor recruitment practice are the vast amount of human error that automation would have otherwise prevented as well as the loss of business that is inevitable as other, more advanced organizations outpace yours and snap up those qualified, diverse job seekers who are competing to work for the most technologically cutting-edge organization out there.
It can be difficult to project the long-term direct and indirect costs of poor recruitment practices, especially when they involve individuals who were never hired in the first place. However, that is all the more reason to cover your bases and develop processes to accompany a powerful ATS platform.