Are you on a small business hiring team that’s struggling to compete against larger competitors for top talent? Recruiting software for small businesses can empower you to compete with companies that have larger recruiting teams and hiring resources. According to the US Bureau of Labor Statistics, employment numbers increased by 315,000 in August 2022. If you are unable to fill positions, your recruiting plan may need to be improved.
Calculating the ROI of recruiting software is important because it can be difficult to convince decision-makers or stakeholders to invest in recruiting software for small businesses. It’s important to build a list of the value it can provide and point out the improved return on investment (ROI) the platform delivers to help persuade them. This blog will guide you through the value an excellent ATS and recruiting solution can provide and help you determine the return it can deliver for your small business.
Why Do Small Businesses Invest in Recruiting Software?
Recruiting software helps optimize the full life cycle recruiting process by increasing the productivity of hiring teams and reducing the time and resources required to make new hires. It can help recruiters with everything from sourcing and screening candidates to scheduling and conducting interviews. This software also automates the entire process from job postings to sending offer letters.
Small businesses tend to have fewer resources dedicated to recruitment than larger corporations and often select one full-cycle recruiter to manage the entire process. Recruiting software optimizes your recruiting process to help reduce applicant-to-hire time and find the best candidates. It can also provide a fast return on investment if you choose the right strategic recruiting partners for your software.
The Value of Recruiting Software
Lower Hiring Costs
Does your company spend too much money on premium sourcing platforms? Excellent recruiting software can help your organization reduce sourcing expenses. In addition to reduced costs, it can provide better in-house results.
Recruitment software often includes an applicant tracking system (ATS). It can provide the best candidates for your job description and create a profile to help you determine the ideal candidates to screen. From the ATS, you can reach out to prospects and track their progress without costly third-party tools or agencies.
Reduce Time to Hire
Inefficient full cycle recruiting processes can result in a long time to fill open positions. A long time to hire turns away candidates and gives your competition a chance to snag some of your best prospects. The average time to hire using a job board takes 39 days, according to a Jobvite survey. While a referral can lower the time to hire by 10 days, on average, you may not always be able to rely on referrals. An ideal recruiting scheduling software suite can reduce your time to hire by several days, helping you hire the best talent faster.
Improved Full Cycle Recruiting Productivity
A primary benefit of recruiting software is its ability to improve the productivity of one recruiter or an entire recruitment team. While the boost in efficiency is more pronounced in small businesses that are scaling up, all companies can benefit from a lean and cost-effective recruitment process.
Robust recruiting software can unify your recruitment process and communications and automate aspects of your recruiting process, reducing your time spent and eliminating common errors. It helps you streamline the hiring process and saves your organization on cost per hire.
Higher Quality Hires
Recruiting software helps full-cycle recruiters improve the quality of their hires with more efficient sourcing, screening, and interviewing processes. A speedy hiring process helps you accommodate those hard-to-source and hire candidates, like software engineers.
Small business recruiting software can also help you avoid making bad hires. Low-quality or bad hires can cost your company in the short term and long term. Bad hires may not meet your organization’s performance expectations or not possess the ideal qualifications, but they can also be qualified individuals that cost the company by abandoning their position within the first 12 months. When employees quit so soon, they can cost your company approximately 30% of their first year’s salary.
Calculating ROI of Small Business Recruiting Software
Now that we’ve highlighted the value recruiting software can provide your small business, you can calculate the ROI the software will provide annually. A substantial expected return can help persuade decision-makers to invest in the software. The following key points will help you calculate the savings recruiting software can provide your small business.
- Time to Hire: Vacant positions can mean a loss for your business every day. Divide your company’s annual revenue by the number of full-time employees to determine the amount each employee produces annually. Find the revenue cost per day by dividing the per-employee revenue by the number of working days in a year. You can find the estimated cost to fill a position by multiplying the cost per day by the typical time to fill and multiplying the product by the estimated hires per year. The reduction in time to hire your new recruiting software provides shows how much you can save from a streamlined hiring process.
- Productivity: An increase in productivity can be difficult to track, but you can often estimate it by knowing where your recruiting process bottlenecks. The time spent bottlenecked is a loss of productivity, and you can quantify the time gained with every eliminated bottleneck. Multiply the number of recruiters your business operates with by the average salary and cost of benefits. The product of this number and the percent of the time you save per year is the savings from increased productivity.
- Quality Hires: As we mentioned above, a bad hire can cost your company up to 30% of their first-year salary. A rough estimate of your savings per bad hire is 30% of the average employee’s salary times the number of hires you expect in the next year. Multiply it by your expected churn rate. The product is your average savings over the year.
Together, these key points make up some of the ways recruiting software for small businesses can save your company each year. These savings can be significant depending on the organization’s hiring needs and scalability but are typically much more than the cost of an excellent software suite for recruiting.
Get a Higher ROI With the Right Recruiting Software
An excellent recruiting software solution can be your strategic recruiting partner, and it can help your business fill positions faster to facilitate growth. Conveying the value of the software, and calculating the expected ROI, will help you persuade stakeholders at your company to invest in a quality platform. Comeet provides sourcing, screening, collaborating, and applicant tracking in one versatile platform, helping your small business get a faster and more substantial return. Schedule a demo with Comeet today.
