How to Cut Down 50 Percent from Your Total Cost Per Hire

Cost is a major factor to consider when it comes to managing a business. And apparently, you would rather reduce the costs than increase it for anything, right? So the big challenge for companies and small business owners today is how to reduce total cost per hire by up to 50 percent. Good thing Elon Musk has something to advise you about cutting down recruiting costs so you can generate more revenue.

Who Inspired This Strategy?

According to him, it's important to stop the process when something is affecting the outcome.

In relation to talent management and recruiting, this kind of thinking is very much applicable. The goal of recruiting is to get as many applicants as needed until the right candidate is hired.

Oftentimes, hiring managers ask recruiters to present more candidates until they find someone perfect for the position. But this is only increasing the costs per hire. And companies need to stop this culture of wrong recruitment strategy.

Tips in Reducing Cost Per Hire by 50 Percent

You would not know what's causing you higher costs in the recruitment process until you realize that you are doing it all wrong. So to help you avoid a flawed recruiting, mix-and-matching, and sourcing strategy, here are some tips to cut down cost per hire by 50 percent:

Take as many as three candidates when hiring. Emphasize to your recruiter that you are only entertaining at least three applicants for an open search. Tell them that you're applying lean thinking when it comes to the hiring process. Also, mention that it is the main obligation of the recruiter and hiring manager to collaborate and meet the objective.

Consider that success is an outcome, not an input. It's important to know that success is not the input, but the outcome of the recruitment process. Ask your hiring manager what the potential hire is required to do in order to prove that he's highly successful. In the interview, ask the candidate what his accomplishments were that can be compared to your company's performance objective.

Make sure the candidates are the target of the recruiting requirements. Hiring managers can benchmark their first candidate by reviewing his LinkedIn profile. Conducting a preliminary phone call could also help determine if the hiring manager is on target.

Identify the flaw if the next candidate doesn't fit the qualifications. Interviewers must be performance-based when hiring new people. To those rejected, review your recruiting and sourcing strategy to spot what's wrong. Do not continue presenting candidates until the problem is identified.

If you do it right, expect for positive outcomes. But if you see something wrong in your business strategies, make sure to make it right before proceeding on the next step.