Recruitment is NOT a cost center – here's how to start proving it in 2023

Recruitment is not a cost center | Sapia Ai recruitment software
It’s an understatement to say that recruiters and talent acquisition managers have had it tough over the last four-odd years. The pressures have compounded like a line of falling dominoes: First it was the COVID-19 pandemic; then came the mass talent migration; then the advent of new concepts like ‘quiet quitting’ and ‘acting your wage’, which, like them or not, seem to be the manifestations of a tired and existentially anxious workforce.

Now, in 2023, it’s likely that we’ll have to contend with a global recession.

Hiring is tougher. Candidates are wary and they expect more. Duh.

So do companies and their CEOs. However – and somewhat counter-productively – many companies have sought to cut recruitment budgets, lay off recruiters and talent acquisition managers en masse, and deprioritize long-term recruitment marketing strategies. We’re facing troubled times, and recruitment (and perhaps HR, more generally) is being treated as a cost center.

This misunderstanding of HR as a money sink is nothing new. It happens during every trough in the market. But, if we don’t make efforts to change this perception, 2023 will be a particularly painful valley to climb out of.

Why is recruitment treated as a cost center?

CEOs have been keen on talent strategy for years, but are struggling to quantify the effects of recruitment and talent acquisition activities. They cannot see the A to B journey, the action and its result. When the market is good, talent is in abundance, and you’re hiring effectively, nobody cares. But when times are hard, nebulous processes are put under harsh light.

Relatedly, recruitment and talent acquisition leaders are struggling to prove that the outcomes of their work are driving revenue. This is primarily an issue of data capture and analysis, in our experience: When companies come to us to help with hiring quality talent, the number one issue they have is to do with metrics and KPIs. Most do not know how to reliably measure quality of hire, nor time-to-hire, nor the effectiveness of their recruitment marketing channels. Many know that their processes are plagued with inefficiencies, but are not sure how to go about fixing them.

(To be clear, totally understandable. This stuff is hard.)

Here’s where to start with proving recruitment effectiveness.

Focus first on areas of lost productivity.

Easier, perhaps, than it sounds. It’s always better to iterate than to completely restructure your hiring function. So get your team together and examine your processes. How much time is spent:

  1. Sourcing and reviewing candidates (including, importantly, reading through resumes and cover letters)?
  2. Screening?
  3. Scheduling, rescheduling, and conducting interviews?
  4. Organizing and corralling hiring managers?
  5. Gathering, collating, and providing feedback to candidates?
  6. Communicating with candidates, more generally?
  7. Onboarding?

Ideally, you have baseline data in your ATS to help you arrive at some indicative numbers. But let’s assume that you don’t: calculating rough person-hours is enough to see where time may be spent more effectively.

In our experience, sourcing and screening are the stages in which quick wins might be gotten. As time-honored research (and our Smart Interviewer product) shows, resumes and cover letters are not useful indicators of candidate quality or potential. They can be easily falsified. What’s more, Sapia and Aptitude research from 2022 discovered that 22% of candidates drop out at the application stage and 24% at the screening stage.

The biggest companies are starting to focus more on this. According to the Wall Street Journal, employers like Google, Delta and IBM are combatting the tight labor market by easing strict needs for college degrees.

Interviews are another huge cause of inefficiency. Structured interviews are the best explainer (at 26%) of an employee’s performance, but many companies allow recruiters and hiring managers to conduct interviews haphazardly, causing a misidentification and loss of talent that can be hard (if not impossible) to measure. If you’re interviewing badly, how can you know if you’re capable of finding good candidates? What’s the associated cost of such a problem?

It’s no surprise, then, that according to our research, 50% of companies say they’ve lost talent due to the way they interview. Big costs involved there.

Next, focus on measurable metrics

Don’t worry: We’re not going to lay out a massive and exhaustive list of metrics you should be tracking. Not feasible; you’re overworked as it is.
Instead, we’ll prescribe three good places to start, including links to helpful blog posts explaining how you measure them effectively:

  1. Candidate abandonment rate
  2. Candidate source attribution (or where candidates actually come from)
  3. Candidate experience baseline

Each of these metrics can help you improve efficiencies, and in turn, start to prove that your recruitment function is having a positive effect on business outcomes.

Layer on tech that can help you drastically improve hiring efficiency, while giving you time to focus on big picture stuff

At a certain point, we must realize that force-multiplying technology is the only way to win in the unfolding ‘now’ of work. We’re spending way too much time with processes that can be repeated and automated – often out of some sense of duty to uphold 1:1 human connection (as if technology completely removes that, which it doesn’t).

And, because we do this, we weaken our position at an executive level: CEOs care about what is scalable, and the average recruitment function, traditionally speaking, does not.

In a recent episode of our Pink Squirrels! podcast, Sapia CEO and founder Barb Hyman had a chat with expert HR change management leader, Kyle Lagunas, about this very topic.

The one foolproof way to elevate recruitment in your company

We exist to help you hire better, faster, and with fewer headaches. Our Smart Interviewer takes care of the scheduling, interviewing, and assessment stages of your process – saving upwards of 2,000 recruitment hours (av.) per month, and enabling you to offer jobs to candidates within 24 hours of application.

It’s delivered in a chat-based format (hello, Gen Z!), and candidate responses are assessed according to science-backed personality models. This means you can be sure you’re getting top talent, and you can prove it with measurable, repeatable data.

That’s not all: Our tech is blind, which means it natively disrupts bias and maximizes the size of your talent pool. Everyone gets an interview, and everyone gets personalized coaching tips whether or not they get the job. Our application completion rate, for all customers, sits at around 85% on average; our candidate satisfaction rate is well over 90%!

(And, if you need a second stage interview, you can use our Video Interview tool.)

Everything you do with our platform is pulled through to comprehensive data dashboards, allowing you to see hiring efficiency, quality, time, diversity, and other metrics. CEOs love this kind of transparency.

There you go: time saved NOT having to screen, review resumes and cover letters, compile candidate feedback, communicate with candidates, or improve hiring manager interview techniques.

When you’re saving that much time and money, your recruitment (or HR) function has more bandwidth to focus on long-term talent acquisition and people initiatives.

Don’t struggle in 2023 – speak to our team today about how we can solve your hiring challenges.

Sign up to our newsletter