3 Ways Hiring Software Saves Money for Your Small Business

by Liz Strikwerda | Sep 29, 2022 | Applicant Tracking Systems, Featured Article

Are you looking for ways to cut hiring costs? If you haven’t automated the hiring process with recruitment software, this is your low hanging fruit for meeting budget goals.

Let’s discuss how you can not only save money but improve your quality of hire in the process:

1. Better candidate screening
2. Shorter time to hire
3. Lower administrative costs

Do the math for your organization with our Hiring & Recruiting ROI calculator.

How Does Hiring Software Work?

One type of recruiting platform is an applicant tracking system (ATS). It is a type of HR software that manages the hiring workflow from job board posting to onboarding. With recruitment software, a small team can manage multiple job openings simultaneously. Importantly, recruiting software shortens time to fill which minimizes costly lapses in productivity. With an applicant tracking system, you can:

• Collect and manage hundreds of applications
• Create templates and libraries for job descriptions, questionnaires, emails, interview scripts, and evaluation scorecards
• Send potential candidates texts and emails and save a record of the conversations
• Post to job boards, social media sites and your careers page within the software without having to log into each site
• Order background and reference checks automatically
• Allow job candidates to self-schedule interviews
• Manage recruiting anytime, anywhere with cloud-based access and mobile tools
• Simplify recruitment marketing with employer branding on all job ads, emails and other assets

Let’s discuss how to save money on hiring. We’ll start with candidate screening.

1. Hiring Software Saves Money With Better Screening

Evaluating candidates is one of the most time-consuming hiring tasks. However, a structured screening process is key to hiring success. Let’s discuss how software makes screening faster and more effective.

Screening can be divided into two stages – immediately upon receipt of the application and post-interview evaluation. Hiring software can automate 100% of application screening and up to 80% of post-interview screening. Applicant screening is a first-pass filtering of job applicants. Separating unqualified applicants quickly is key. With the process of elimination, you create a smaller pool of promising candidates.

Application Screening Questionnaires

Though you begin filtering as soon as you start receiving applications, you prepare earlier. Create your prescreening questionnaires before you post your job, once you have created your job description.

Once you post a job you are competing with other employers to find great candidates. Take the time up front so you don’t slow yourself down after the applications start flowing in. Another advantage to creating your filtering questions before posting the job is that you can make changes to your job description if necessary.

In your hiring software, create an application questionnaire based on the job description. Following that, determine the scoring system for the questionnaire and assign point values. In addition, identify elimination questions that will knock out the applicant. For example, if you are hiring a CPA, you may want to eliminate job seekers without the certification.

Resume Keywords

You can also use the applicant’s resume for first-pass filtering. You assign points based on resume keywords. For example, if you are looking for an accountant, you can add points to their score if their resume includes “CPA.” Consider how knock-out questions, weighted scoring, and resume parsing can separate qualified candidates from the applicant pool.

Once you have screened the questionnaires and resumes, your hiring system can sort your applicants by score. Contrast this process with reviewing applications and resumes by hand.

Interview Evaluations

The interview evaluation process is a critical time. At this point, you’ve invested many hours engaging and interviewing your finalists. But for many recruiting teams, it’s challenging to get useful feedback from all decision makers. No matter how many employees you engage in the hiring process, it’s important that you have a structured, thought-out process. This is where candidate scorecards are an invaluable recruiting tool. With your ATS or hiring platform, create interview evaluation scorecards. These are similar to the filtering questionnaires, except each member of the interview team fills them out.

Based on the job ad, use multiple choice, star ratings or scale questions in the evaluation form. This prevents vague “gut feelings” from introducing bias into your decision. When each member of the interview panel gives feedback, you improve the evaluation process. Each person’s perspective and expertise improves the scoring.

Finding a great hire requires a well thought-out structured interview evaluation process. Yet if the process takes too long, the best candidates have already taken positions with employers that have a faster process. The best recruiting software helps with both speed and effectiveness. First, it gives you the tools to screen strategically. Second, it automates where possible to compress the timeline. The result is a high quality hire poised for success.

2. Hiring Software Saves Money by Shortening Time to Hire

A long recruitment process increases the chance that you’ll make a bad hire. High quality candidates are being recruited by your competitors. They aren’t going to wait weeks or months for a job offer.

According to the U.S. Department of Labor, a bad hire can cost you up to 30% of the employee’s wages for the first year. Let’s do the math for both an entry-level and senior employee. ZipRecruiter tracks the average entry-level salary by state, with a range of $25,712 to $35,793. Let’s take the lower number: 30% of $25,712 is $7,713. A minimum wage employee – say a fast-food or retail worker – costs their employer enough to employ a great hire for four months. On the other end of the spectrum, the cost of a bad hire in a senior position can be astronomical. A bad hire in a $200,000/yr executive position would cost $60,000.

Recruiting software doesn’t just speed up filtering and interview scoring. It shortens every step in the hiring process.

Job Posting

As mentioned previously, hiring platforms with job posting software integrate with job boards like Indeed and LinkedIn as well as job marketplaces like JobTarget.

Interview Scheduling

The best recruitment software integrates with scheduling calendars. This allows interviewees to self-schedule their interview slot. This can shave days off time to fill because it eliminates back-and-forth texting, emailing or calling to pin down a time.

Background and Reference Checks

Background checks are essential for due diligence in the employment process. With the one-click integrations, hiring managers can order background checks from their recruitment software.

Candidate Communications

Keeping applicants informed of their status is critical, though time-consuming. If you’re doing high-volume hiring, however, it’s nearly impossible. An applicant tracking system automates this with templates and triggers. Stage change triggers automate candidate updates, for example. This is how it works:

• Build your hiring workflow using hiring stages (applicant status): Application Received, Do Not Pursue, Schedule Interview, Interview Confirmed, Make Offer, Background Check, etc.
• Create an email or text template for each stage in your applicant tracking software (these can vary by job title or other criteria)
• Enter merge fields in the templates to personalize the message with the candidate’s name, address and the job title

Imagine the time you can save with automated recruitment texting. Ghosting candidates is a surefire way to lose them. With auto-communications, your top candidates will always know their status and be less likely to abandon the process.

3. Save Money on Hiring With Lower Administrative Costs

What are the labor costs associated with your recruiters and hiring managers? Let’s say you have five people who earn an average of $30 an hour. Now suppose it takes your team 20 hours to hire one employee from job opening to onboarding. That’s $600 in labor.

What if automation could shorten the time to five hours? This would reduce the labor cost to $150. Now we’re not encouraging you to let anyone go, but you could delay hiring a new recruiter as your company grows. Or you could lessen your dependence on an outside staffing agency. In addition, your talent acquisition team and hiring managers could spend more time on revenue-generating activities.

Improve Efficiency with Mobile

Modern recruiting software is cloud-based can be used with any connected device. Mobile recruiting software is another key efficiency booster. It allows your recruiting team to work from anywhere. In other words, your recruiters can work 100% remotely or have a hybrid work schedule. Giving your employees flexibility in where and when they work is a powerful retention tool. Higher retention saves money as well.

Final Thoughts

Hopefully, we’ve made the case that hiring software is a savvy investment – especially when you are trying to cut operating costs. To try our award-winning small business recruiting software for free, visit ApplicantStack Free Trial.

Top image by Antoni Shkraba on Pexels