By: Scott Martin, National Account Manager
The average cost for a company to hire an employee for a $15/hour job is over $4,000. A single posting on one job board costs several hundred dollars. Background checks can run in the hundreds per candidate. Training a new employee up to the point of full productivity, which typically takes 12 weeks, can easily exceed a thousand dollars. And this is if you’re able to find the right person within the average time-to-hire of 24 days. But these days, in the midst of an extreme talent shortage, we all know that’s a huge if.
Managers are left asking themselves what the cascading effects will look like in 30, 60, or 90 days. Productivity, revenue, morale, and turnover issues quickly come into play and compound the longer hiring drags on. At that point the costs of not partnering with a staffing agency become significantly more than having engaged one early.
Employers and Candidates Are Both Frustrated
A common hiring scenario today goes like this: A company needs to fill 10 positions. They set up 50 interviews, but only half show up. After three weeks they are only able to find four qualified candidates. Then, after all that, only two accept.
That’s a lot of time, resources, and money to spend for those results. But as frustrating as it is, there are clear reasons that scenario is increasingly the norm rather than the exception. There are currently only 0.6 people available to fill every job opening, 25% less than before the pandemic. American staffing companies hire 15 million temporary and contract employees a year, but candidates have more options and leverage than ever. If they’re the right fit for your company, chances are they are for others, too.
Candidates are also frustrated with the hiring process today. While 78% of employers think they set clear expectations and communicate well during hiring, only 47% of job seekers feel the same. With 80% of candidates saying the hiring experience influences whether they take an offer, employers face a lot of pressure to provide an experience they may not have the bandwidth and resources to provide. The skyhigh no-show rates today are due to a combination of candidates keeping their options open and unmet expectations.
Pay Attention to Your Pain Points
There are three big pain points we hear about over and over today. Agencies that don’t tackle these issues head-on will fail their clients and candidates.
- Candidate quality. The quality of talent starts with access. Does the agency have a deep talent pipeline with the skills you need? Do they have the local and national presence you need? Do they specialize in your industry? Will they put in the hours to research the market? Do they pre-qualify their talent? Do they have alternative workforce solutions like travel teams, RPO, and EOR to solve problems quickly? The decision to engage a staffing agency becomes a lot simpler the more of these questions they can answer with ‘yes.’
- Rising no-show rates. Combatting no-show rates is an industry-wide problem these days, but it can be mitigated by choosing a staffing agency with a strong reputation and clear set of values that includes trust. Look for agencies with high redeployment rates, as this indicates strong candidate relationships as well as the ability to successfully assess candidate-role fit.
- Poor communication. All too often, employers are put in difficult situations when they are kept in the dark about hiring hiccups. With the huge talent gap, high turnover, increasing no-show rates, and the obvious desire to fill positions as fast as possible, things happen. But timely, accountable communication can’t be sacrificed. When it is, employers, candidates, and agencies all suffer.
Companies often engage with staffing agencies because they need to solve challenges that threaten productivity and profitability in the short-term. Agencies make their names by being hyper responsive, nimble, and adaptable to new business initiatives, product launches, seasonal and holiday surges, and supply chain interruptions. That will always be the case, but the value that consistently shows up in long-term ROI is what’s driving more and more employers to build strategic partnerships with agencies.
Improving quality-of-hire is the recruiter’s top priority today. Even small gains in retention, especially as we take lessons learned from an era of predictable unpredictability going forward, will be game-changing for employers down the line. After two years of putting out fires and being forced to think reactively, top agencies are rededicating themselves to client relationships and long-term goals. The new shared reality for employers and agencies is that the best candidates come from continuously nurtured talent pipelines and fluid, proactive hiring.