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 In-House Recruitment Revealed (Part 1)

The True Cost of In-House Recruitment Revealed (Part 1)

Driven largely by a desire to avoid the cash flow impact of fees charged by professional recruitment agencies, online job boards have, over the course of the last 10 years, become the favoured method of recruitment for many SMEs.



Many of these companies use professional recruitment firms to help them find and recruit senior staff (reporting directly to the CEO), and turn to online job boards to fill most other positions.


Doing so often results in a high price for the business, in terms of a higher staff turnover, lower staff retention rates and an increasing incidence of bad hires.


Whilst some business owners and leaders are happy to accept this as the price one pays for saving tens or hundreds of thousands of dollars a year in recruitment fees, others are starting to question the wisdom of taking a penny-wise / pound-foolish approach to improving the most valuable asset in their business. Their people.

In this article, we go one step further, and de-bunk the mythical savings of in-house recruitment.


To investigate the cost benefit of in-house recruitment, we have built a financial model that compares the true cost of in-house recruitment to a typical recruitment agency fee of 15%.


In the example below, we apply this model to the recruitment of a senior salesperson on an $80,000 p.a. package.


The results might surprise …




That's right. If all costs are allocated to the self-recruitment process, it is actually more expensive than recruiting via a professional recruitment firm.


What’s more, a professional recruitment firm offers you a 6 month replacement guarantee, and is proven to reduce the likelihood of a bad hire by more than 50%.


So the only real benefit of using an online job board is the cash flow benefit of not having to pay the recruitment fee in 7 or 14 days.

The good news is we have found a solution to that issue as well.

You can find more information about better ways to fund recruitment here and more about the topic in our next post too...

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Written by BizPay

BizPay is a seamless technology platform that solves cash flow challenges associated with paying business invoices. The company was founded to help businesses grow better by enabling them to use top suppliers and professional service providers. Frictionless, transparent and affordable, innovative payment products allow businesses: to split bills into 4 easy instalments and/or receive full invoice payment in 24 hours to grow their businesses without being constrained by cash flow.

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