About the author: Katya Osadchuk. CEO of Indigo. Economist, professional psychologist, and a savvy HR with over 10 years of experience, 6 of them as HR Director. She knows everything about team search and extreme headhunting.
* Dedicated to all sourcing specialists and HR directors who cherish corporate finances. As well as CEO and helmsmen, seeking to understand HR budgeting.
Whichever company I worked for as an HR, be it a large charity fund, an international company with salaries in pounds, or a young sharp-toothed IT business, not a single owner or CEO, even in the environment of high trust, has ever told me “Katya, hire the most expensive ones. Knock yourself out.”
It was always necessary to justify the budget and optimize costs. This is what we talked about at #TruKiev (and we want to continue the conversation at #TruLviv and #TruKharkov).
As a rule, the budget is always limited and HR has to plan it wisely.
And there is a certain zest in it. A professional HR is like a Michelin star chef – they create a masterpiece with a limited choice of products.
In this case strategic thinking is critical. Once you are financially limited, you need to unleash your imagination. This is the very case when you create an enchanting dessert out of nothing.
You can work effectively with any budget if you plan it rationally.
What does it mean?
It means that HR understands the business, its problems, needs and opportunities.
It is quite easy to identify problems in business. You just need to talk to different groups of employees about their pains (with the C-Level in the first place), and what they expect from HR. Analyze key HR metrics for the past period (for example, ROI per staff, revenue / profit / costs per employee, cost per hire, staff costs in total expenses, turnover rate in general and for specific categories of employees), and forecast them for the next period based on the company’s strategy and financial plan (if not on paper, then surely it must be in the owner’s head). With a little analysis you will have a clear recipe of priorities.
And if you feel that a business needs a hearty “borscht”, then instead of buying meatballs and falafel, plan the budget for products to make borscht. In this case there will be no problem with argumentation, and the CEO won’t have a sense of uselessness of HRs (read more here).
Saving on job ads and online tools
Do you spend your budget on job ads? Ever tried to save on it? It is easy if you use your creativity.
Use storytelling in job description, post it on social networks and see how virality works – when interesting content becomes viral automatically.
Storytelling can and should be used in the promotion of the company. Often all the pages on the websites are the same – dry numbers, standard social package and dull information about ultrasonic growth rates. But if you dedicate a little time and effort (not even your budget), your page can relate to potential candidates with the help of your own employees. Add sincere, crispy crust stories. Let someone tell you how they joined the company in June, and grew into a Lead. Or, how they were going to join some reputed company to gain experience, but were carried away by the projects and the soul of the team so hard that in 4 years they matured into a Project Manager and forgot about changing the job.
Actually, this is a part of the notorious employer’s brand development. And it’s cost-efficient.
You can scrimp on buying sourcing and database maintenance tools up to a certain time. But this is a dubious saving, since the efficiency of data processing and the speed of filling vacancies are significantly reduced. In addition, it makes the work more complicated when there are several recruiters in the company. Semi-finished products are not useful for business.
Saving on bonuses for internal and external recruiters
Saving on bonuses for filling a vacancy.
The whole point is that you either need to be ready to work with beginner recruiters who come for experience, not money (for now) and, accordingly, a certain quality and number of candidates and search terms. Or pay a high fixed salary (but how profitable can it be for a business?). Or decide for yourself that recruiters in the company will constantly change and leave along with the candidates, as it happens the same with good sale rates.
Saving on recruitment agencies. Often possible. But there are cases when, ultimately, the cost of agency services, compared to the value of business losses due to the lack of people, and therefore on timely solved tasks, is incomparably small. Our company, Indigo, analyzed cases that make companies resort to our services:
- They’ve searched for a long time, but in vain, and time is running out. Another level of expertise (the quality of sourcing and hunting) is needed.
- A new project has popped in and there is an urgent need to recruit a team. The number of positions cannot be filled by the existing recruiting team.
- They don’t have an internal recruiter.
- It is difficult to “sell” a vacancy – reputation is either spoiled or their company is unknown in the market.
- When the expertise of the agency is higher than the internal expertise.
- When a hidden search is needed.
- It is necessary to fill a C-Level position, which means that certain hunting skills and the base of candidates are needed. In addition, an internal search can lead to unpleasant situations when people know about the change of top managers in the market earlier than desired. Or a personal networking is spoiled, because “I know that you tried to lure my CTO away… don’t do that …”.
In such cases external recruiting is not a luxury, but a vital necessity.
In other cases, it’s an area for cutting corners.
How can a company brand help HR save money?
Create a company image that will allow the right candidate make a decision in your favor. To choose your company among thousands of other companies.
At this point you can create something essential for your business (totally free, by the way) – understand exactly what kind of people your business needs. Keep the business needs and strategies in your mind, draw a portrait of perfect candidates and analyze what appeals to them when choosing a job.
In marketing terms, you need to understand the needs of your target audience and create a delicious offer for them (Employee Value Proposition).
You don’t need a lot of money for creation or promotion. In order to save money, searching time, retention and salaries it is enough to scrape the bottom of the barrel with ideas and be diligent.
Salaries are below market average?
Find out what a candidate values more than money.
Every seasoned recruiter faced a situation when it was necessary to find an excellent candidate for a position with humble financial terms.
What should you do in this case?
Rejoice, for this will allow you to hone your professional skills. If you cannot lure a candidate financially, you should consider their other motives.
Example: Candidate Greg wanted $2k, and the company “Dawn IT” could offer $1.5k tops.
During the interview, it turned out that Greg was interested in creating a project from scratch, and not just to “re-do” some part of it. But could not leave work and devote himself entirely to development (you can’t feed your family with an idea).
Dig deeper: what project are they interested in and compare it with your current and future opportunities. It is likely that you will get off on common interests.
And it happened that Greg needed to work on one project, with the prospect of launching a new one, where he could steer the process and hone his skills. So Greg happily agrees to $1.5k.
In another case, candidate Tom requested a minimum of $8k. Tom was too expensive for the company.
During the conversation (it is important that it’s a conversation, not an interrogation), it became clear that Tom dreamed about creating his own business, but didn’t have experience working in a business environment from the inside. So the prospect of working in a small company, where Tom could influence various areas of business, even with a decrease in financial expectations by 30%, made him very happy.
And if we go back to saving on a salary or bonuses for a recruiter, then even here you can think of a way out – find a person who needs remote work and a flexible schedule. Can you imagine how many mothers on maternity leave, talented students and people who just want to manage their time, travel and not be dependent on the place of work will be happy about such a proposal?
A good recruiter is like a good baker. They understand who wants raisin buns, and who wants an onion roll.
Delve into all the pros and cons of the company, projects, responsibilities, as well as the needs of the candidates and find common ground. It is likely that part of the money can be replaced by experience, development, flexibility and a viable challenge.
But don’t lie about non-existent advantages – set the record straight and highlight the key points.
And in conclusion I would like to add: understand the role you are playing in business.
You are a business trustee – the first person who offers savings, or an advocate of candidates or the champion of tasty buns and the size of massage chairs.
Let’s save with gusto 🙂