An honoured tradition, management teams across the globe in every industry typically meet at this time of year to look at the road ahead and make budget projections. Strategies are discussed and plans of how to grow in the upcoming year are laid out. A level of excitement builds as new initiatives are agreed upon and a path to success is laid out. The promise of a shiny new year sparks hope in the hearts of executives.
The Revolving Door
Budgets and plans are necessary, but employees to carry out said plans are even more vital. And if recruiting is not a line item in your budget, how do you expect to meet revenue targets and beat your competitors? Recruiting has become one of the most competitive areas for the retail sector. The Hay Group (a division of Korn Ferry) surveyed top retailers and found the turnover rate actually grew from 57% in 2015 up to 65% in 2016. Retailers well know they will need to replace more than half their front-line staff even before the year begins, making it seem obvious that recruiting should have its own line on the budget.
Still not convinced recruiting is important enough to take up a whole line on its own? Bersin by Deloitte estimates that companies spend an average of $4000 USD to fill an open position, which is almost 3 times the cost of training said employee. Not to mention the unknown of whether that new hire will last. Also keep in mind that competition to find that great employee (and not just a warm body) is fierce.
Forbes estimates the global recruiting industry at over $200 billion USD, which includes job boards, applicant tracking systems, recruitment firms, professional recruiters, and social media. Did your company hire anyone last year? Of course you did. And do you know what that cost was including the tech, salaries, benefits, and opportunity cost? Guaranteed it is a much larger number than what you might think.
Budget Planning Items for Consideration
Every company in the Retail sector is familiar with the temporary nature of their employee base. Servers, cashiers and other retail positions are typically filled by students paying their way through school or are their parents supplementing their “real job”. Companies with large front-line numbers know that the bulk of their employees are not building careers and they will have recruiting needs this year.
- Evolving Recruitment Channels
The new challenge that many employers discover in recruiting is how the game has changed. Job postings are only the tip of the iceberg and hiring through new channels such as social media are growing in popularity. The landscape of recruiting is constantly changing, and some big players are now stepping into the recruiting space.
- The Google Factor
2018 promises to be a very exciting year in recruiting. The birth of Google’s recruiting offering, Hire, will undoubtedly have a huge impact on the world of recruiting in more ways than one. However, the main focus of Hire at the moment is making it easier for candidates to find jobs. The general premise is that Google uses its searching expertise to better understand what individual words candidates are using to find jobs, and matching them to the myriad of job titles that exist.
This is all great for candidates finding jobs, but that only raises the price tag for employers to get their job postings to the top of the search. And everyone knows that getting to the top of a Google search costs more money than most companies are willing, or able, to pay. Did you remember to consider the training costs for current HR staff and the opportunity cost involved in that staff becoming efficient with the new tech?
- Technology Upgrades
Utilizing an Applicant Tracking System (ATS) has become ubiquitous for companies of every size. They are necessary systems that save your recruiting team countless hours by sorting, tracking, and organizing candidates. As new technology enters the recruiting world, your ATS must be upgraded in order to maintain seamless performance. Such upgrades are rarely, if ever, cheap.
Stabilizing your Recruitment Budget
Does your organization consistently overshoot their recruitment budget? The most common reason that can prompt extra recruitment spending is turnover. It is unfeasible to eliminate turnover, but there are ways to improve an organization that will help mitigate the problem. HR professionals recommend improving employee engagement, modifying workloads, providing opportunities for better work-life balance, and enhanced recruiting to hire better candidates that immediately fit the existing culture.
While most of these improvements require strategic internal initiatives, Recruitment Outsourcing Solutions providers can assist in augmenting your recruiting efforts to hire candidates that better fit your culture from inception. Specializing in recruiting retail employees, Mindfield improves your recruiting efforts by adding background checks, reference checks, and behavioural assessments built into the application process to help you find the best candidates available that will provide longer tenure and slow down that revolving door. Contact Mindfield today to learn more about how we can help you hire better and reduce turnover.
Mindfield is a Recruitment Outsourcing solutions provider that partners with companies to create powerful hourly workforces. Our solutions combine a recruitment team, simple to use technology and a data-driven hiring strategy that promises to improve the quality of your hourly workforce. This approach focuses on tying business outcomes such as sales performance, tenure, and engagement to the selection, hiring and measurement of quality candidates.