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52% of employers say the most significant problem facing SMBs is labor quality, and 76% of recruiters and hiring managers say attracting top candidates is their top challenge.
In today’s competitive job market, finding and hiring the right talent can be daunting for many organizations. While qualified candidates may be available, budget constraints can often limit hiring opportunities and make it difficult for businesses to grow. When organizations are forced to operate with limited budgets, they may struggle to attract and retain the same top talent as more prominent companies with deeper pockets, ultimately impacting their bottom line.
Small and medium-sized businesses are always going to be budget conscious. When we polled our users, we found that 70% of them utilize organic job postings instead of sponsored job postings, with most citing budget constraints as the main reason.
This post will examine tips and strategies for hiring top talent with a limited budget.
How to Hire High-Quality Employees on a Limited Budget
- Focus on Netting High-Quality Hires (Quality over Quantity)
- Plan a Budget and Allocate Resources
- Leverage Your Network
- Develop a Social Media Following
- Invest in Recruiting Technology
- Have a Great Onboarding Process
Focus on Netting High-Quality Hires (Quality over Quantity)
Even on a budget, companies may feel the need to cast a wide net and attract as many candidates as possible. However, focusing on quantity over quality can be costly in the long run. Low-quality candidates can lead to increased turnover rates, toxic hires, and lower productivity—according to the U.S. Department of Labor, the cost of a bad hire equals approximately 30% of that employee’s salary.
- You can up the quality of your candidates by:
- Using an applicant tracking system (ATS).
- Administering pre-employment testing.
- Creating candidate personas.
- Being transparent with salary and benefits.
- Offering flexible or remote employment.
Additionally, when making hires, look at the work that needs to be done and assess how many people you need to accomplish said work. You may pay an experienced job seeker a slightly higher salary than you were planning but get the same amount of output as two less experienced candidates (this could be especially helpful for newer companies or startups where employees wear many hats).
Hire for Potential
When hiring on a “limited budget,” it’s also essential to look for candidates with potential. Consider hiring entry-level or recent graduates who are eager to learn and grow with the company. They may not have all the skills and experience you seek, but they can bring fresh ideas and a willingness to work hard.
Plan a Budget and Allocate the Correct Resources
Having a budget strategized and mapped out means knowing what kinds of monetary constraints you’re dealing with.
Create a budget by writing down external and internal recruitment costs (based on history) or estimates (based on research) and divide them by the total number of hires you’re seeking. That should give you a rough indication of your cost-per-hire.
- Internal costs include things like recruiters' time and salaries, time spent interviewing, and the cost of hiring platforms.
- External recruitment costs include agency fees, job advertising, events, employer brand costs, and any advertising you do.
A budgeting strategy also means you can allocate funds appropriately—sometimes, spending more in the short run can outweigh costs that may be accrued in the long run. For example, sponsoring a job may not initially look like it fits into your budget. Still, when you take into consideration how it can help you hire candidates faster, it may seem like a no-brainer. On LinkedIn, for example, you can post a job for free, but paying to sponsor a post garners 3x more quality applicants.
Indeed reports that employers are 4.5x more likely to make a hire when they sponsor their job post, and ZipRecruiter finds sponsored posts receive 11x more applicants than organic posts.
Leverage Your Network (Including Internal Candidates)
One of the best places to look when filling new positions—and someplace many employers egregiously overlook—is your current staff. You can save considerable time and money by promoting internal candidates who are already familiar with your organization, company culture, and core competencies—Jobvite’s Recruiter Nation survey found internal hires are the best source for quality candidates.
Setting up an employee referral program is also a great idea. Your employees undoubtedly have a solid network of talent they can tap into, and referral employees have higher retention and satisfaction rates.
Develop a Social Media Following
79% of job seekers use social media as part of their search. Additionally, 58% of U.S. consumers follow brands on social media, and a study by The Aberdeen Group found 73% of Millennials found their last job through social media. Developing a social media strategy takes some thought but doesn’t cost anything.
Invest in Recruiting Technology
The best advice we could give you when hiring on a budget is to obtain recruiting software (if you haven’t already). 76% of SMBs and 98.5% of Fortune 500 companies utilize applicant tracking systems (ATS)—recruiting software used to automate, optimize, and strengthen the hiring process—to ensure they’re recruiting better candidates faster. The stats back up this investment—78.5% of ATS users say it’s resulted in better-quality candidates, 86.2% say it’s made their hiring faster, and 94% of ATS users say ATS use has generally improved their hiring. It’s an investment that pays off in the long run (especially if you’re in a high-turnover industry).
A lengthy hiring process can be costly and time-consuming. Streamline your process by focusing on the most critical steps, such as resume screening and phone interviews. This will help save time and resources while still finding quality candidates.
Have a Great Onboarding Process
Bad retention rates and customer churn aren’t going to help you increase your hiring budget, and they cost money—the average cost of replacing an employee is around 20% of their annual salary. Onboarding is a critical step in the hiring process. Though it technically begins after a hire is made, you could start helping candidates think about onboarding during interviews. Discuss company culture, the onboarding process, and what the candidates should expect at prominent checkpoints (first day, month, 6 months, etc.).
A great onboarding process doesn’t just include administrative tasks, but helps new hires align with the company’s business goals, work culture, and mission. Having a great onboarding process will help with retention rates—good onboarding increases new hire retention by 82%!
Limited Budgets Shouldn't Limit Good Hires
Hiring employees on a limited budget can be challenging, but it’s not impossible. Defining your needs and priorities, leveraging your network, utilizing recruiting software, and using cost-effective hiring strategies can help you find your next quality candidates without breaking the bank. Remember, hiring for potential and offering flexible work arrangements can help you attract top talent while keeping costs low.
Need more advice for getting good hires? Check out The HiringThing Guide to Increasing Your Applicant Traffic.
About HiringThing
HiringThing is a modern recruiting and employee onboarding platform as a service that creates seamless talent experiences. Our white label solutions and open API enable technology and service providers to offer hiring and onboarding to their clients. Approachable and adaptable, the platform empowers anyone, anywhere to build their dream team.
