“How to conceptualize and implement an efficient strategy to manage the trade-off between need for talent and minimize costs associated with hiring?” This is one of the questions that need to be answered for effective organizational recruitment and selection strategies and finding the right candidates.

According to a report released by US Department of Labor Bureau of Labor Statistics, more than 2 million people leave their jobs voluntarily each month. The Society of Human Resources Management has found out that cost of replacing an employee ranges from 50 to 400 percent of the employee’s annual salary. The data focuses on the significance of finding the “right” candidate thereby reducing the company costs.

Let us see how hiring cost is defined: Hiring costs is the sum of an organization’s:

Sourcing Costs: This is an amalgamation of consultants/vendors used for hiring purposes, advertisements, referrals, job fairs etc.

Internal Costs: This includes the internal salaries, facilities, stationery, travel, relocation expenses.

The first step is to find out the current cost per hire, which poses a great challenge for most large organizations. Secondly, define a proposed cost per hire state. It is always beneficial for the key stakeholders to define the required state before initiating significant steps towards it.

Setting up talent targeting plan: Define the target market from where the organization wants to recruit.

Analyze and select the right vendors: Compare the efficiency of various consultant agencies/vendors responsible for hiring for you. The best way would be to ask them to create a business proposal, indicating their past projects and success rates. Choose the best agencies as per requirement.

Make the internal employees responsible: Offer your current employees potential non-cash incentives for referring the desired role to their friends/past colleagues/relatives.

Devise and maintain a strong Employee Value Proposition: Increase the visibility of learning opportunities, career development and brand equity that your company exhibits. These will pose as significant attraction for the prospective candidates, especially Gen-Y, which focuses more on the freedom and opportunities organization offers rather than cash incentives and bonuses.

Go Online: Utilize the various online channels that are becoming increasingly popular among the masses. The online messages must be targeted after sufficient market research.

Ankita Agrawal is an MBA graduate (HR) and is part of the 2012-14 batch at Symbiosis Center for Management and Human Resource Development. You can follow her on Twitter @ankagr9891