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5 best ways to reduce recruitment costs

Looking back at the last two decades in the recruitment sector, we see a series of drastic modifications flash before our eyes, that cause the changes in recruitment costs. As companies brace themselves for even more changes, they are seeking answers to two big questions:

What recruitment challenges does the future hold?
How will tackling and solving these challenges affect the bottom line?

Corey Berkey, Vice President of Human Resources at JazzHR, shared his expectations about future recruitment in January 2021: «I think it’s not necessarily a complete rewrite of the recruiting process for everybody, but I think it’s time to look and revise and improve and think about the process of improvement over time. I think there’s going to be a lot of iteration going on here in the next 12 months.»

One thing is clear about the recruitment of tomorrow: digitization will keep growing. Nearly a quarter of new businesses already utilize Artificial Intelligence tools to recruit people. It means two things for employers: more ways to hire new professionals and a potential reduction of recruitment costs.

In this article, we’ll do a deep dive into what options companies have regarding hiring staff and how to optimize related expenses.

Cost of hiring a new employee

Looking for employees, bringing them to the team, and integrating them into the company is a significant investment. That’s why leadership needs to approach hiring knowing recruitment fees and related expenses.

Recruitment costs

The first step of the hiring process is reaching for your wallet. Your company will have to purchase ads on the most popular job search websites. Also, your in-house recruitment specialists will have to devote time to distributing job ads, reviewing applications, screening candidates, and scheduling interviews, which adds to the cost of recruitment. And lastly, drug tests and background checks for candidates will eat into the company budget.

Onboarding costs

After spending all that money on recruitment comes the next expense: training. The business’s task is to educate new employees about performing their duties to generate profit for the company as fast as possible. For many companies, training becomes the largest recruitment investment: on average, employees spend over a week of their working time on orientation and initial training.

Integration costs

Integration costs start as insignificant spending but can come to cost companies a pretty penny. This recruitment stage involves providing a newly-hired employee with the necessary tools and conditions to perform their duties. Such conditions include an ergonomic workstation, a computer, cell phone, and other devices needed. In some cases, it may even include a car or covering travel expenses.

Agencies and their recruitment charges

In an attempt to optimize their hiring process, many companies turn to recruitment companies. Even though they may not necessarily be a cheaper option, agencies do bring some major benefits:

  • Talent access
  • Fast and effective
  • Knowledge and experience

Talent access

Looking for skilled professionals is the main focus of recruitment companies. For this reason, successful agencies have some tricks up their sleeves to contact the most best qualified candidates in the market, even those who aren’t actively searching for jobs. Many job seekers also choose to work with hiring agencies instead of applying for positions directly because of their efficiency.

Fast and effective

Quite often, not working with a recruitment agency to save money is bad thinking. The more time it takes a company to employ a specialist, the more money it loses. Agencies accumulate all their resources and expertise to find great candidates as fast as possible. They remove the company’s in-house HR managers’ workload as they handle all the initial parts of the recruitment, from screening candidates to scheduling interviews.

Knowledge and experience

In some industries, finding the perfect employee is a distant dream rather than a short-term goal because of shortages of qualified candidates. This is where recruitment agencies’ accumulated market knowledge comes in handy. Their representatives help employers create lists of requirements—even for niche positions—assist with insights on salaries for different markets, and of course, find candidates that match the job description.

The benefits of recruitment agencies are hard to overstate, but how much do companies have to pay for their services? The standard recruitment agency fees range from 15% to 30% of a remuneration package. Having said this, the actual percentage depends heavily on the industry and the level of an employee. For instance, finding a low-level employee may cost businesses 10%, whereas agencies only charge 30% when hiring an executive.

Automated tools pricing

Technology is another solution companies use to hire staff. It has proven high efficiency without costing an arm and a leg. For example, Unilever claims to have saved thousands of pounds and 100,000 hours of human time by using artificial intelligence for their recruitment.

Technology enhances recruitment by gathering and analyzing data from numerous sources to help recruiters access worthy candidates and spend less time on routine. Here are the main benefits of HR automation tools for recruitment:

  • Finding better candidates by automatically analyzing the job market and screening the potential candidates
  • Increasing productivity by involving recruiters in the hiring process to work with pre-selected candidates
  • Shortening hiring cycles by automatically searching for employees for several positions simultaneously
  • Enhancing candidate assessment by automatically identifying their experience, core values, and motivation
  • Improving applicants’ experiences by automating and personalizing communication with candidates

Bill Kutik, a globally recognized HR Technology columnist, believes AI is already changing the HR sector. He says, “Like the very best applicant tracking systems, AI-based platforms today can be told who your organization’s top competitors are and fast track any applicant to a human recruiter who has worked for one. The same for anyone with skills you desperately need.

As for recruiting software pricing, again, it all depends. Some tool providers charge $25 per month for using their software. In cost per hire example, companies pay $500 per user. Also, many automated tools have a free version and offer a free trial to test-drive capabilities.

LinkedIn recruiting pricing

Linkedin has become a go-to platform for both recruiters and job seekers. Not only is it a place where people hunt for jobs and employees by networking, but also LinkedIn Jobs and LinkedIn Recruiter features offer expanded opportunities for the job market.

There are two options for companies to hunt candidates on the platform: free and premium.


To reach the candidates without spending company budgets, there are some strategies recruiters should employ:

  • Create and regularly update the company’s LinkedIn page
  • Build a network of current and former coworkers and company employees
  • Reach out to candidates with personalized messages
  • Use keywords to look for potential employees
  • Go to LinkedIn groups to find candidates


If you want to step up your head-hunting game, switch to LinkedIn Premium. The LinkedIn Career pages cost is $29.99/month, while the Business plan costs $59.99/month. Here are some features that companies pay for:

  • Access to InMail (the platform’s email system) and its Templates
  • Seeing your profile viewers
  • Potential candidates database
  • Insights about your business
  • LinkedIn learning educational platform

Low cost recruitment

The industry offers a variety of paid tools for hiring a workforce that can drain your budget. However, these techniques can help reduce your average cost of recruitment:

  1. Improve your Careers section
    Make sure the Careers page of your website showcases the benefits of working for your company. Add photos of your team’s activities, employee testimonials, and reviews from Glassdoor and LinkedIn. List job openings and make sure that candidates can easily apply.
  2. Stay present on social media
    And don’t focus only on LinkedIn. Many professionals, especially the younger generation, regularly check out profiles of companies they are interested in and apply on social media. You can also promote your job opening on LinkedIn, which is more cost-effective than paying for an ad on a popular job search website.
  3. Introduce a bonus system
    Word of mouth is still a potent means of communication. If you motivate your current employees with a financial reward, they may bring you highly qualified workers. Bonuses and employee referrals reduce search time and boost the reliability of candidates.
  4. Digitize hiring
    The number of HR tools is overwhelming, and many of them are free. One of the most popular lifehacks nowadays is digital interviews. Zoom or Skype meetings drastically reduce the time and expense of interviews for everyone involved. Some companies go even further and conduct fully-automated interviews. The recruiter sends the candidate a link to the platform with the list of questions, and the candidate follows the link to record short (up to 30-second) answers.
  5. Increase retention
    The easiest way to save money on recruitment is to not need to look for new employees. Investments in the job satisfaction of current employees reduce turnover and the need for new hires. These investments aren’t limited to perks and incentives and can extend to training and morale-building activities. Make sure to survey employees and consult industry literature to identify the areas to work on.

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