3 Proven Strategies To Reduce Hiring Costs


Hiring costs continue to increase substantially year after year as job search platforms like Indeed and Linkedin are oversaturated with companies searching for the right talent. With competition for top talent at an all-time high and the labor market at full capacity, reducing hiring costs is difficult unless you analyze the complete employee lifecycle. The problem is most companies only look at hiring data to reduce hiring costs, instead of understanding how to integrate candidate quality and retention data into the equation. Below we provide three strategies to reduce hiring costs and visualizations examples of it in action.

1. Analyze Quality Hire By Recruiting Source

One strategy that you can implement to reduce hiring costs is to analyze quality hires by recruiting source. This works very well for companies that have multiple recruiting channels that they are posting jobs to, and where they have candidates from many different sources. The Quality Hire metric can be measured in many different ways. For example, you can base it on performance KPIs, tenure or a mixture of both.

The reason this helps you reduce hiring costs is by identifying the most effective sourcing channels for attracting top talent, allowing you to allocate your budget more efficiently to those recruitment sources that are driving better quality candidates. The more efficiently you allocate your hiring resources, the less you’ll spend on recruiting thereby reducing hiring costs. 

In the example below, you’ll see the quality hire percentage by channel for a customer service role. You’ll notice that the two best sources for this role are referrals and Glassdoor, while Indeed and ZipRecruiter produce less quality hires. Knowing that referrals and Glassdoor are better sources, you can reallocate more budget to those areas. In the case of referrals for this role, it is probably worth increasing the incentives to get more candidates in the funnel.

Figure 1 Reduce Hiring Costs

2. A/B Test Job Post Copy & Formatting

A second strategy you can implement to reduce hiring costs is by A/B Testing job post copy and formatting. Having the right copy and format for your job posts can lower your cost per applicant and increase quality applicants. Some areas where we’ve seen A/B testing job post copy and formatting work is with job post length, keywords and style.

A/B Testing is a strategy that is commonly used in marketing to optimize advertising campaigns, where they compare two difference campaigns and see which produces the best results. This allows you to compare and test different job posts to see which is likely to reduce your hiring costs.

In the example, below you’ll see the difference in copy length for the same job listing vs. cost per applicant. You’ll notice that the job listing with between 500-750 words performs better than the both the job listing with less than 500 words and more than 750 words.

Figure 2 Reduce Hiring Costs

3. Build Ideal Candidates Profiles With Data

Another strategy that you can use to reduce hiring costs is to build idea candidates profiles based on your data. This exercise can help reduce hiring costs for several reason. First, it allows you to better understand based on historical performance and hiring pipeline data what leads to better quality hires. 

Second, it allows you to integrate behavioral data within your Ideal Candidate Profiles so you can add better keywords to your job posts. And thirdly, it helps your hiring team operate more efficiently by knowing who to target based on proven set of criteria that excels in the role.

In the below example, you’ll notice the difference in quality applicant percentage for engineering candidates who possess either patient or impatient behaviors. Those that are patient, are more likely to have better hiring success. With this being the case, you can then add patience as a keyword into your job posts which can help lower the cost per applicant and increase your quality applicant rate.


Figure 3 Reduce Hiring Costs

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