What's the Average Cost of Recruitment in the UK?
Posted on 21st February 2023 at 15:00
The post-COVID and Brexit era has impacted significantly the recruitment market in the U.K. The pool of candidates has reduced significantly, making it a competition, and a race to temp the best candidate to move over from one role to the other through specialised head-hunting.
The cost of recruiting nowadays is not simply reduced to their annual salary, in fact, the national statistics centre calculates that based on an average salary of £27,600, the cost to an employer in the first year of a candidate’s employment can reach £62,890*.
How can you avoid a high recruitment cost?
There are a few things to consider:
If you don’t have your own in-house recruitment team, find a suitable staffing solution business. Recruiters (also known as recruitment consultants or talent acquisitions executives) are as necessary and helpful as accountants. A good recruiter will help you save thousands. But it’s important to find a suitable one. Most recruitment agencies charge between 20%-30% of a candidate’s annual salary, find a business that will be able to undercut the competition with more cost-effective solutions and you will already be in the right direction.
Make sure that the recruitment agency you choose is transparent about their prices as many will not advertise them online. We all know the price of a McDonald's cheeseburger, equally, you should be able to find out the cost for a business service with ease before you make a decision. Research for staffing agencies that are proud to disclose their services and associated costs on their websites or other online channels such as social media.
Clarify the services included in the placement fee. Some of the biggest recruitment agencies in the U.K. will require an upfront fee regardless of the role being fulfilled. Lookout for more personalised down to earth services that will create a job ad, advertise and do head-hunting for you at no cost, unless they find you the perfect candidate.
Outsourcing your recruitment means passing over that workload to professionals and consultants, no matter whether you choose an independent firm, a small local boutique agency or an international firm. Choosing this option will save you resources and especially time to focus on your area of expertise, as resourcing is an incredibly consuming task, whether you require mass, temporary or permanent staffing.
Recruiting for a role, will require you to write a job ad, place costly advertisements on one or several platforms, spend time sifting through applications, contacting any possible suitable candidates trying to arrange an interview, interviewing them a couple of times, etc. It’s calculated that the time consumed by companies that try to source their own candidates, can be up 30% of their time. It’s important to consider this, as most businesses will lose this precious time before considering hiring a specialist.
Moreover, it is key to consider the costs associated with a bad hire. The Recruitment and Employment Confederation has estimated the cost of placing the wrong candidate to be up to triple the cost of the initial position’s salary. On average, the cost of making a bad choice in your hiring process can reach the £30,000 mark. If you take everything into consideration such as the advertising cost, and the human resources, the cost is £7,000 for a low salary position in the best-case scenario.
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