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How much does a failed recruitment cost?

Don't just count the advertising costs when recruiting a worker, but also the cost of the recruiter's hours and the cost of the probationary period. Among other things, this was the topic of a presentation at last week's recruiTECH. In the first part of our series on the recruitment conference, we also look at the role of selection time and employer branding.

Toborzás Felvételi költség-

Integration is a key issue when recruiting a new employee. Hunam Personnel Solutions Ltd., a recruitment consultancy, conducted a survey with nearly 50 HR managers working in a wide range of industries, including automotive, electronics, chemicals, food, logistics and IT. On average, these companies recruited 15-20 employees per year. They measured recruitment time, costs and take-up and exit costs. From the answers the selection time was between 30 and 60 days - of course, in simpler jobs the position can be filled in less time, but especially in the IT sector, the filling time was even longer than 90 days - said Tünde Farkas, managing director of Hunam.

Hiring costs over one million forints



According to them, if we want to calculate the cost of an average position that can be filled in 45 days, we have to take the average time spent by a recruiter on search - if he or she spends 12 hours a week on search, that's 72 hours - which, calculated from the average salaries in their position, means a wage cost of 450,000 forints. On top of that, there are additional costs: advertising, database, interviewer manager, etc. All of this adds up to an additional HUF 733,000, or a total of HUF 1.18 million for a single position.



The research shows that companies experience a 14% drop-out rate. The first reason for this is that the colleague accepts another more favourable offer, the second is that they stay in their original job - they use the offer they received to get a pay rise in their original job," said Tünde Farkas.



Almost 2/3 of the companies surveyed have some kind of integration programme. These include, for example, welcome gifts, training, education and one-to-one meetings. But it takes more than these to integrate a colleague. 50% of companies with an integration programme employ a mentor, mainly a professional mentor, while some only employ buddies to carry out social integration. However, a much higher proportion of this would be needed, according to Hunam's CEO.



Only one engineer's exit costs 2.5 million forints



In the first three months, 12% of people quit voluntarily, mainly because the job is not what they expected. Sometimes they got a better offer from another company or, for example, found it difficult to get to work. If you are properly informed, they have found that this rate can be reduced. The cost of one employee who was lost - for example, a quality engineer with more than three years' experience, a basic salary of HUF 850,000, the cost of leaving, the cost of colleagues' time - was HUF 2.5 million. In the companies surveyed, the dismissal rate is 11.5% - this is due to inappropriate attitudes, professional non-compliance or not picking up the pace.



Based on the previous data, for a 20-person organisation, a 23.5% turnover rate (which means 5 employees who voluntarily leave or are dismissed) means that the cost of departing colleagues is HUF 11.4 million. Tünde Farkas says that to prevent this, we should spend money and time on integration programmes. Invest energy in careful selection. Use an objective measuring tool in the selection process. And beyond that, you need an onboarding plan for the first few weeks of the new employee's employment, but don't let go after that, it's very important to follow up the first three months," summarised the Hunam CEO.



How long is the recruitment period?



It's worth clarifying the recruitment process, defining concepts and expectations between HR and senior management. This was the lesson of a presentation by Eszter Klesitz, Site HR Manager at Valeo eAutomotive Hungary Kft. who used a case study from last year to illustrate how to make the success of the recruitment area visible. Their company had 29 openings for engineers in various fields, but they were not able to present an entrant within the timeframe expected by the management. But HR did a good job: within 74 days of opening the positions, they had accepted offers. The fact that there were still no entrants was due to the notice period, which for engineers is 3-6 months. "In a conversation with senior management, we had to clarify that if management can tell the recruiting team 6 months in advance what people they want to see and when, we will be able to provide at least half of that time," said the recruiting manager. "The lesson is that you have to measure smart, you have to think beyond the numbers that build on each other," added Eszter Klesitz.



Employer branding is a team game, the whole company is involved



The claim that employer branding should be separated from product marketing is bullshit - this was the astonishing statement that Vanda Dénes, CEO of OpenOnline, began her presentation with. "In people's minds, we are Audi or we are Facebook. And the employee comes to us - to Audi in Győr or to Mercedes in Kecskemét - because we are Audi. They don't want to go into the car industry, they want to go to that particular brand," the CEO said, underlining his opening statement. Vanda Dénes believes that it is a mistake if the communications, marketing or HR departments do not work together, but in her experience, management, labour and payroll are often not involved in employer branding.



Branding is a visceral feeling, an emotion, and that's why you need communication from many sides. Employer branding can also be measured by searches: you can see what searches are coming to our careers page and if the number of searches for the brand is increasing there and not the number of searches for the position (in other words, if they are not searching for "SAP developer" but "SAP developer job at XY company") then employer branding is strong.



The promise and reputation that I radiate about myself should go to the best and most talented people. So we communicate our values to candidates with the most relevant information. We shouldn't think of talent branding only as an attraction, because it is also a career path, an internal communication. We should not only talk about jobs, we should try to show all the good aspects of our company - whether it's a Facebook or Linkedin series or something else - but we should also not forget about what's happening.Don't think in terms of a cookie-cutter way - just show career paths, ambassadors - show your life. The goal is to build a positive community of employees who dare to come and work for your company. "We are who work for us." Everybody brings personality, talent, experience and that's what makes up our company, our value, what we have to figure out how to communicate to the outside world. These values will even motivate our employees in the long run. Employees can eventually become an "advertising surface". In one logistics company in Győr, a relatively expensive thermo sweatshirt was given to the employees and the company became absolutely visible: people wore the blue sweatshirt in the shopping centre, on the main street, in the cinema, because it was of such high quality. They were getting something that was useful to them and of value, and in return they felt valued and connected to the organisation.



Recruitment marketing also meant that we targeted guys who were anime fans at one of our clients, so we targeted people who were interested in the same thing. Not only will he fit in and work his way into the team sooner, but he will feel at home in an environment that is similar to him beyond the fact that he has the qualifications. These can be communicated backwards through newsletters, internal magazines. Employer branding is therefore a "long-term game", while recruitment marketing is a tactical move. If we combine employer branding, values and communication, we can use these to recruit.


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