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Escaping the Cost Trap: Breaking Free from Traditional Hiring Approaches

AI
calendarMay 30, 2023
calendarAlan Bourne
Escaping the Cost Trap: Breaking Free from Traditional Hiring Approaches

Imagine a company caught in the grip of archaic hiring practices, wasting valuable resources and missing out on top talent. The reliance on CV screening and traditional interviews leads to a labour-intensive and subjective process, resulting in suboptimal outcomes.

It's a painful reality that most companies still face today.

As budgets have tightened in recent times, it has become evident that throwing labour at the hiring challenge is no longer feasible. Talent acquisition teams have no choice but to reinvent how they work to deliver more with less.

The key lies in driving out administrative activities and embracing end-to-end digitisation, empowering recruiters to focus on what they do best: recruiting.

This mindset change has already taken root in other functions such as sales, operations and marketing. Now it’s time for talent acquisition to do the same. By integrating cutting-edge science with a digitised workflow, a comprehensive assessment platform empowers organisations to eliminate wasted effort and unlock the potential for fair, high-quality hiring—delivering an exceptional candidate experience along the way.

 

Escaping the Cost Trap: Breaking Free from Traditional Hiring Approaches

What are the costs of inefficient assessment?

The costs incurred due to inefficient assessment in your hiring journey are multifaceted and immediate. They include:

  • The direct expenses associated with assessment tools and software. Traditional unit consumption models or reliance on multiple point solutions can quickly escalate costs and prove prohibitive. In contrast, opting for a comprehensive platform like Sova offers fixed annual costs, leading to significant savings and enhanced predictability.
  • Furthermore, inefficient hiring imposes a heavy burden on recruiters, who spend valuable time sifting through CVs, conducting interviews, and managing administrative tasks. In fact, recruitment can become up to two-thirds administrative work, diverting attention from the core objective of identifying and attracting top talent. Analysis by Nationwide Building Society found they were able to remove 90% of internal administration involved in managing the assessment journey after they had implemented the Sova assessment platform.
  • Beyond this, hiring managers' valuable time is consumed by candidate interviews, draining resources that should be better utilised elsewhere in the business. For example, Vodafone were able to reduce time spent on interviews by 66% by using automatic scoring and ranking of interviews using Sova’s platform. Recent analysis for a large UK retailer making over 5000 hires a year showed that Sova’s platform approach enabled over £480k savings in labour costs, a 35% improvement due to less time spent on screening and interviewing candidates for those roles.

Nationwide Building Society found they were able to remove 90% of internal administration involved in managing the assessment journey

The repercussions of suboptimal hiring extend beyond immediate costs.

  • Inadequate assessment methods result in poor retention rates, diversity outcomes, and premature employee departures. Considering the substantial expenses involved in hiring and training, which can amount to as much as half a year's salary per head, each premature departure represents a significant loss for an organisation.
  • Moreover, a flawed hiring process leads to low-quality hires, subsequently hampering overall organisational performance. A robust and effective hiring process should identify high-potential talent consistently.

Research across multiple industries has shown that the value of a high performer relative to the average in professional roles can be in the order of 40% of salary.

Organisations can easily find themselves trapped in a cycle of low quality, low retention hiring where recruiters and hiring managers work tirelessly but achieve little real progress. The key to breaking this vicious cycle lies in implementing an assessment platform that combines cutting-edge assessment science with a fully digitised workflow. By leveraging such a platform, wasted effort can be eliminated, enabling organisations to unlock their true potential for fair, high-quality hiring, exceptional candidate experiences, and cost-effectiveness.

For example, Vodafone were able to reduce time spent on interviews by 66% by using automatic scoring and ranking of interviews using Sova’s platform.

So what savings can be achieved with the next generation approach?

Having illustrated both these sources of unnecessary cost, there are considerable savings that can be uncovered, whether an organisation is moving from a 100% manual approach or is using some assessment tools but in a piecemeal, fragmented way.

Ditching CV screening and moving on from traditional interviews

A traditional manual workflow might involve posting the job ad, asking for CVs at application or hunting for candidates on LinkedIn. Then the recruiter invites applicants, sifts them, schedules interviews, perhaps does first interview, then hiring managers conduct the subsequent interviews.

This process is incredibly subjective and riddled with bias.

So poor decisions get made at every stage, but not only that, it creates huge risk for diversity and inclusion. It is also very admin heavy and takes a huge amount of time for both recruiters and hiring managers. That time costs much more than it should, but also makes for a very dry and disengaging experience for candidates with very long time to hire.

The opportunity for savings is also both great and immediate. Relative to traditional hiring, Sova’s next generation approach can save 30-40% of labour costs by automating tiresome sifting and scheduling, and saving time spent on interviewing for recruiters and hiring managers. This means the talent acquisition function can focus on engaging and attracting the best hires, whilst using budgets wisely and serving it’s real purpose – to attract and retain high performing talent.

 

Escaping the Cost Trap: Breaking Free from Traditional Hiring Approaches

Discarding legacy, first generation assessment

Many organisations have improved on this manual baseline, but are still stuck in first generation assessment. For example, they might be using some off the shelf tools for screening candidates more objectively with some improved fairness, but this only goes so far. Adverse impact still occurs when individual tools are used in isolation, leaving a suboptimal situation with limited capacity to sift out poor candidates fairly.

20-30% of recruiter and hiring manager time and labour costs can be saved using a blended assessment approach that filters fast to the best candidates as fairly as possible.

This halfway house still leaves many pain points unresolved, which hurt in terms of time and money. For example, costs of unitised testing can be high, relentless administration remains such as scheduling candidates, and too many candidates still have to be seen as the hiring funnel has not been optimised. This not only leans heavily on recruiter time, but also hiring managers still spend way too long interviewing rather than focused on core activities. By using an optimised and blended assessment approach, which filters fast to the best candidates as fairly as possible, around 20-30% of recruiter and hiring manager time and labour costs can be saved.

In addition to these savings, the benefits of time to hire can also be substantial. For example, a leading international travel business where able to reduce their time to hire eightfold from 8 week to 1 week by using a seamless assessment journey in the Sova platform combining screening, scheduling and virtual assessment centres.

Moving to a seamless, digitised approach

Sova’s next generation approach to assessment transforms hiring from these manual or piecemeal solutions. Instead, each element is seamless and mutually reinforcing to make the best hires, accurately, fairly and efficiently whilst giving the candidates a great experience. Candidates start by finding out about the job and undertaking much more engaging assessment to understand their fit for the role. This stage is optimised for the role so it is as accurate, fair and fast as possible. If successful they can immediately schedule to the next stage, be that an interview or assessment centre. At that step they virtually connect with assessors to determine whether they are right for the role, enabling swift and effective decision making.

A leading international travel business where able to reduce their time to hire eightfold from 8 weeks to 1 week by using an assessment journey in the Sova platform combining screening, scheduling and virtual assessment centres.

To help you quickly assess how you could drive down costs while transforming your hiring, Sova has created an online ROI calculator where you can swiftly estimate the savings that can be made.

Summary

As outlined above, every day without taking action is simply more money wasted. Organisations can quickly see the immediate savings to be had via the online ROI calculator and drive out waste in their hiring processes.

By identifying gaps and inefficiencies, they can make informed decisions and optimise their practices. In today's competitive landscape, embracing modern assessment methods is no longer a luxury—it is an absolute necessity for organisations striving to excel.

The shift from traditional hiring approaches to a modern, seamless assessment experience is a game-changer. By bidding farewell to outdated practices, organisations can unlock success through efficiency, quality hires, greater diversity and an enhanced candidate experience. The power lies in their ability to adapt and prioritise the adoption of transformative methods.

It's time to seize the opportunity and revolutionise hiring for good.

Escaping the Cost Trap: Breaking Free from Traditional Hiring Approaches