When it comes to talent acquisition, most HR and recruitment teams are measured by the twin metrics of cost per hire and time per hire. The key measure for recruitment success is usually considered to be quality of hire, but most organizations find this hard to quantify. Is it the length of time someone stays with you, or how productive they become within a certain period? Some might prefer to look at longer-term milestones such as promotion, whilst many companies now seek to assess the influence an employee has on both their teams and the outcome of projects on which they work.
Whatever measures are used, it seems that both the cost and time of hire are increasing, and vacancies are remaining unfilled for longer. In a 2014 report, global business forecasting and analysis consultants Oxford Economics concluded that the full business cost of replacing a member of staff could be around £30,000. This included the logistical costs of recruiting and integrating a new employee as well as the cost of lost output whilst they got up to speed. This latter factor, also defined as the cost of someone being less effective until they reached optimum productivity level, accounts for over 80% of the total cost.
Estimates from the UK usually back this up, with a figure of around £5,000 as the average cost of recruiting an employee. US figures are often a little different. In 2015 the talent acquisition software business iCIMS estimated that the cost of having a desk unfilled could be
as high as $500 a day (which translates to around £390 or €435) and that the average length of time to fill a vacancy was 44 days. Around the same time, global business insights consultancy CEB (now Gartner) found that the length of time to fill a regular vacancy had risen by over 60% since 2010.
Through the use of video, checklists, quizzes, interactive assignments or virtual reality, Appical allows you to get your new hires hit the ground running by completing all onboarding formalities and meeting the new team virtually before they even come onboard.
Across Europe, there are reports of skill shortages. Concerns over both the quality of future management pipeline and access to the skills necessary to keep the business agile regularly top the list of CEO and business leader challenges. Whichever measures we use, the costs associated with recruitment and retention are rising. For many businesses, the focus is usually on the transactional expenses of advertising, interviewing, accessing digital career sites and briefing staffing agencies. However, as we have already seen from the Oxford Economics research, the associated costs of recruitment can be very high.
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