The True Cost of Not Having a Recruitment Onboarding Software in HR

For a busy recruitment or HR team tasked with managing the organisation’s recruitment activities, I’d like to share with you the true cost of not having an effective recruitment system in place. And by effective, I mean a system that streamlines some or all of your recruitment and onboarding processes and saves you heaps of time to focus on those other projects you’ve been wanting to get to for ages.

To demonstrate this, I have separated the missed opportunities of not having an effective recruitment system in place into two separate categories, the tangible things like time and money wasted (immediate cost-saving impact); and the non-tangible strategic opportunities that if missed, can take years to regain and can have a detrimental impact on the overall employer brand value proposition (EVP).

Ok, let’s take a look at each of the two categories.

Category 1 – Areas Where a Tangible Amount of Time & Money is Wasted

Job Requisition Approval

The paper-based or a clunky not-fit-for-purpose job requisition approval workflow – HR, hiring managers and management can save so much time with an online and tailor-made job requisition form that makes the often lengthy approval process so much more efficient.

Posting

Posting to your company’s own career site, or multiple postings to free and paid job-boards and social media sites – so much time and money is wasted in this area which could be better spent searching talent pools you’ve nurtured in your own recruitment system or a one-touch job posting system.

Managing Applications

From inbox folders or on an Excel spreadsheet – a challenging thing to do at the best of time but when you’re short of time and desperately trying to remember the name of a particular candidate who applied for a role 6 months ago, a nightmare! Imagine being able to search your own database specifying a suburb and the radius a circle around it, postcode, skill set or company at a touch of a button and then being able to email the candidate directly or send them a text message inviting them to apply for an opportunity that is perfect for them.

Communication

Having the ability to send branded emails and letters to candidates regarding their applications directly from their recruitment record.

Talent Pools

For future roles – Creating and maintaining talent pools to significantly cut down on the need to advertise and trawl through hundreds of unsuitable resumes.

Letters of Offer

Saving time by not having to use Word to create and mail out employment documents and, instead; generating letters of offer and employment contracts directly from the candidate’s recruitment record and emailing it to them.

New Starters Information & Forms

No more paper-based forms! Instead of generating forms or attaching electronic information packages and sending them directly to candidates with their appointment letter.

Electronic Signatures

No more chasing the boss around to sign a contract, instead; sending a contract via email for electronic signing and even better the candidate being able to sign electronically too and reduce the turnaround time to getting a signed contract back.

Onboarding

No more processing onboarding paperwork manually, forms can be sent directly to Super funds and the ATO or to your Payroll department.

Data Entry from Recruitment to Payroll

No more double handling – data can be exported directly to the payroll / HRIS system or systems can be integrated through an open API.

Removing the above manual processes and implementing a system to do all of this for you could amount to saving you and your team over 20 hours of labour per role. Translate these savings into $$$ for a company with 500 employees – assuming a 20% turnover rate and therefore 100 placements each year – is equivalent to 2,000 fewer labour hours, one full-time role or approximately $75,000 each year. There’s your justification for executive management to implement a new recruitment system right there!

Category 2 – Strategic Opportunities Missed & That Take a Long Time to Recover

Reliance on Advertising

The missed opportunity of not being able to build a segmented database and talent pools that you can hire from as well as advertising – instead you’re mostly dependent on expensive and time-consuming advertising for every vacancy.

Free Job Posting

Not being able to take advantage of all the free job ad boards now available.

Hiring Managers & HR Not Working in Isolation

Not having the ability to support hiring managers as well as you’d like to or having managers ‘go rogue’ and not follow the process.  Envisage having the ability to share candidate details and other collaboration tools with managers and also tailor the system to get managers more or less involved in the process as best suits your organisation.

Accurate Recruitment Reporting

Without an effective recruitment and onboarding system you’re missing out on accurate, real-time reporting which can save so much time on collating data manually to create reports.

Employer Branding

Every ad that you advertise or share could either make you look good with candidates and make you look bad.  If they make you look good, then you’re increasing the pool of candidates that are prepared to work for you and therefore apply when you advertising the next role.  Having a great career site that 100% connected with your recruitment software will place you in the update-to-date, modern and cool companies that people want to work for you.  The same impression is formed when someone sees your job vacancy share on Facebook, for example, to bring them back to a world-class career site that all automated, connected and slick will increase your followers out there.  That’s employer branding.

Drop-Off Rate

How many times did it happen to you where you spend hours and hours moving a candidate up through the recruitment process only to see them dropping off right at the end – for example, you send them a 2-KG pack of papers for their onboarding and you just don’t hear from them again.  A slick, automated and quick recruitment and onboarding processes will for an absolute fact, reduce your dropoff rate – the drop-off rate alone could be costing you up to 30% of your entire recruitment cost.

If we scale up the size of an organisation to say 1000 employees and again assuming a 20% turnover we would expect to see the following activity in a 12-month period:  

• 200 job requisition forms filled out and submitted by hiring managers
• 200 jobs posted to about 6 online job sourcing sites, such as Seek, Indeed, Facebook, LinkedIn, etc
• 200 jobs posted on the company’s career site
• 100 jobs posted on the company’s internal career site
• 4000 candidates screened, and 1,000 candidates moved through the various recruitment stages
• 3800 candidates informed they are unsuccessful in their application
• 200 candidates on-boarded
• 100 employees sent a contract variation or updated terms and conditions requiring their signature
• 20% saving of time due to a lower drop-off rate

If the organisation was operating without an effective recruitment and onboarding system this would equate to thousands of hours of manual labour, which could be better spent on developing your EVP, talent searching and other exciting projects to take your department to the next level.

I hope you found this blog useful, especially if you are in the process of putting together a business case to justify the cost to implement new recruitment software in your organisation.