10 Cost Saving Strategies for Hiring in a Tough Economy

While hiring in a tough economy does have its advantages, including the ability to be choosy when picking from a larger than usual applicant pool, there is still a considerable cost related to bringing on someone new. Not only must you budget for a new employee’s salary, but you also have to consider the costs associated with posting job ads and conducting background checks as well as the time spent screening and interviewing applicants – and that’s all before they’re even working for you! Once hired, there is the cost and time involved in training and orienting new employees and sometimes a slow learning curve until the new hire gets up to speed.

While hiring a new employee might be necessary, spending big bucks on the process doesn’t have to be. To follow are some simple cost saving measures to consider when looking for talent during tough economic times:

1. Network. Use existing resources to your benefit. Speak with colleagues and peers to see if anyone knows a skilled individual that is looking for work. Word of mouth is much cheaper than an ad on CareerBuilder.
   

2. Internal job postings. Consider if any current employees can fill the open position. When posting jobs internally you save time and money on recruiting and applicant processing, and in most cases, you’re already familiar with the candidates’ work performance. Just remember that when an employee is promoted into a new position, a new vacancy is created, which will inevitably force you to seek external talent, usually at the lower-level.
   

3. Employee referrals. Having an Employee Referral Program (ERP) is an excellent way for employers to generate quality candidates. With an ERP, employers encourage their current employees to recommend qualified individuals for available positions. Employers then offer incentives such as cash bonuses, extra vacation days, and trips for any referrals that result in the hiring of a new employee - much cheaper than the use of print ads, recruiters, or employment agencies!
4. Applications on file. Look to the applications you have on file. Previous candidates may not have been a good fit for you in the past; however, varying requirements, changing business needs, and new openings may make a previously mediocre candidate an ideal one this time around. Sometimes, timing is everything!
5. Post ads on free sites. There are a variety of free job posting websites should look to before posting your opening on some of the more costly job boards, such as Monster or CareerBuilder. Even local newspapers can get expensive! Consider posting jobs ads with local colleges and universities, government employment agencies, or free sites such as Craigslist. Gauge the response you get; ultimately it may be necessary to broaden your horizons and post on some of the more popular and expensive job sites.
6. Thoroughly screen applications & resumes. Weeding out candidates during the initial stages of the hiring process will help you save valuable time down the line. Although resumes can provide some significant details regarding an applicant’s qualifications, it’s important to supplement a resume by requesting all candidates that meet your requirements complete an employment application. When reviewing applications and resumes it’s important to look for signs of attention to detail and thoroughness as well as previous work experience, education, qualifications, and tenure with other employers. All of this information can tell you a lot about a candidate’s overall fit for the open position.
7. Conduct a phone interview. By now, you should have a good idea of which candidates meet your requirements. Those passing your initial resume and application screening should be called for a quick (20 to 30 minute) phone interview. A phone interview is designed to clarify the information supplied in a candidate’s application and resume and to get a general feel for the candidate’s overall fit with the company. Once you have completed phone interviews and narrowed down your applicant pool even further, invite remaining candidates in for a face to face interview.
8. Be picky. There are lots of people looking for jobs right now, which means that you pretty much have the opportunity to be as selective as you’d like. When making a hiring decision, take your time. Review candidate evaluation forms and speak with anyone who had contact with the applicant, this includes the receptionist who greeted the applicant, the person who scheduled the interview, and those that had the opportunity to interview the candidate. Input from multiple sources is always best when making an important decision. Taking time, being cautious, and weighing your options can end up saving you thousands in replacement costs.

9. Conduct background checks. Once you have made your selection decision, now is the time to conduct background checks. Job offers should always be made contingent on the results of a background investigation, so if any negative information does surface, you have the flexibility to rescind the offer. A background check ensures that you are not hiring anyone with a suspect past and confirms the employment and education history a candidate provided during the interview stage.
10. Understand your legal requirements. A lawsuit can cost your business thousands in lost revenue, not to mention it can tarnish your reputation. Make sure you understand all legal requirements as they pertain to pre-employment inquiries and background checks. Interview questions should always avoid anything that might reveal a candidate’s affiliation with a protected class (i.e., their race, religion, age, national origin, disability, or family status). Further, when conducting background checks, employers are mandated to follow the requirements established by the Fair Credit Reporting Act (FCRA). For more information on your legal requirements as they pertain to pre-employment screening, visit the Background Checks section of our state & federal laws.

Hiring a new staff member does require energy, commitment, and most importantly money. But, by implementing some of the cost saving measures listed above, you’ll save on recruitment expenses and costly hiring mistakes.