Recruiting costs minimization

Companies are not leaving any stone unturned and thereby are spending a lot on resources in the process for getting the huge talent requirements and to get the best of the lot. Recruitment costs are becoming increasingly heavy on the pockets and there is a dire need for them to look for something cheap without compromising on the quality of recruits. And with the rise in costs, they are growing more cautions about recruitment expenditure. There is an age old adage ‘Give and Take’ or ‘you gain some, you lose some’. And this adage seems to be put in practice by many companies.

Organizations are using a host of innovative and at the same time, run-of-the-mill methods to hire employees. But in order to be effective and innovative, the compromise has been settled on the high costs. The hiring costs have shot up manifolds and companies have started to get affected in their P&L accounts. The average recruitment cost per employee can range anywhere between Rs 50,000 to 60lakhs, depending on the position.

So how do companies hire fresh talent? They usually have a host of methods ranging from internal movements where the company advertisers the position within the organization. This method is considered to be very cost effective as the employee is already a cultural fit and the talent stays within the organization. They also advertise in the mainstream press though it is usually as it includes not only the advertising cost but also the cost of processing, screening and interviewing the candidates.

Many other companies have on-campus and off-campus initiatives for hiring fresh graduates. They also use an optimum channel mix strategy for hiring experienced people. The channels of hiring would include in-house technical recruiters using portals and own network, employee referral program, placement consultants etc.
Recruitment costs are taking up a major part of the annual budgets of the organizations and are engaging a lot of resources. Companies are working in the direction of reducing these costs so as to save on the costs and allocate funds towards strategic project. The best way to minimize recruitment cost is to make sure the role of consultancy agencies is reduced to the minimum. Recruitment agencies are the best forms of cost effective hiring as one can outsource the ‘headache’ to a specialist firm and only pay on successful completion of the assignment.

Companies are working on reducing the average cost per hire by relying on employee referrals, innovative recruiting mechanisms and reducing the reliance on head-hunters. The average cost per hire is approximately Rs 30,000-40,000. To recruit the best talent along with a faster turnaround time companies are creating a planning schedule for all critical positions and identify people (insiders) for such positions which impact business. In some cases organizations maintain a three great candidate ratio for each position and relevant database. Such initiatives can reduce Recruiting costs.

Companies have devised actions plans which suit their needs best and at the same time cut the recruitment costs without compromising on the quality. Most of the recruitment at senior levels is done through contacts. Recruit through employee referral scheme has become a ‘Right’ feature which helps us in getting the right person for the right job at a very nominal cost spent on recruiting.

Internal referral is the most effective and cheapest mode of recruitment. Employees are encouraged to refer people for different positions. It ensures to attract the best talent and also gives an empowering signal to employees about their engagement within the company.

One of the most cost effective modes of recruitment is the daily walk-in interviews that conducted at company’s offices. This way, recruiters will be able to capture the profiles of a significant number of potential candidates that help the recruitment process. Walk-ins are undoubtedly the best and inexpensive mode of hiring, and it has proved effective in volume hiring opine many HR managers.

  • sarmarani


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  • Nupur


    Thank you for this information rich article.



  • varsha sharma

    these are commonly used methods, i m looking for some fresh n creative cost effective methods. i will b very thankful to u if u cn help me out with some new methods………….. reply

  • Ramesh Babu

    Thanks for information, i want know more about present and situvational changes in recruitement, if could share with me i will be thankfull to you.

    Ramesh babu