The cost of recruitment
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The average cost of hiring a new employee in the UK is around £5,300 according to a new survey. That compares to just £2,200 in the US, suggesting that UK businesses are at a cost disadvantage when it comes to the costs of recruiting staff…
Why might there be a differential like this? A key reason is that many UK firms are reliant on recruitment agencies to source job applicants. Agencies are an expensive way of recruiting - they typically charge around 25% of the successful applicants first year salary. Of course, it might be that a specialist agency is the best source of applicants for a vacancy, but there may be most cost-effective methods available these days for firms prepared to innovate in the way they advertise job vacancies.
The article describes one large retailer that has turned to social media (e.g. Facebook, LinkedIn) to reach out directly to potential job applicants. As a result, the retailer has reduced the cost per hire to just £1,700 - a significant cost saving.
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