Anyone who's ever tried to fill an open position within their business, even in times when there appears to be plenty of talent available, knows just how difficult and time-consuming the hiring process can be. And when that position is for a highly skilled individual within the construction, energy or petrochemical fields, finding the right person can be a nightmare.
As with any critical function of your business, there's cost and time involved, but do you know exactly how much it's costing to hire a single new staff member? Or even how long it really takes?
And when you see the answers, perhaps the most important question in all of this is actually: is hiring in-house staff really worth it any more?
Hiring Takes Time and Money
Using talent analytics to research onboarding data across a host of industries, Bersin by Deloitte has calculated how much it costs to bring new people into your business.
Bersin's study found that, on average, it costs US$4,000 to fill a single open position in the US. And that's not all - it also takes an average of 52 days to find and onboard just one new hire.
In the UK, Bersin found that the average cost of talent acquisition is £5,311 per hire. Markets with smaller talent pools that are sometimes reliant upon expatriate talent, like Singapore and Hong Kong, could spend even more.
Consider for a moment that these are averages, aggregated across a multitude of industries. Now think about how that average increases when applied to the construction, energy or petrochemical industries.
There are thousands of businesses operating every day in these industries where, for example, highly skilled claims professionals are needed to tackle a niche contractual issue. Or perhaps someone with particular experience of cost reduction methods is needed on a multi-billion dollar oil and gas project.
Those average costs very quickly seem conservative.
How to Work Out Your Cost Per Hire
So how do you work out your own average cost per hire?
To accurately determine how much it costs your company to find and onboard every new hire, you need to take the following factors into account:
External Recruiting Costs
Background checks, work eligibility (visas, etc.), and drug testing
Recruitment process outsourcing
Internal Recruiting Costs
In-house recruiting staff
Systems (e.g. applicant tracking systems)
Full-time internal recruiters
Since the COVID-19 pandemic, you should also account for increased safety and hygiene requirements within your internal recruiting costs - particularly if you plan to have in-person interviews.
The cost of additional cleaning measures within workplaces, social distancing requirements and sanitation facilities are affected by the number of people in your office and on your site. Post-hire, these costs will fall into your daily running/overhead costs.
Time frame to fill headcount
The above factors make up your cost per hire calculator to give an accurate cost per hire (or "CPH") for your business.
What Does it All Mean?
As a business operating in the construction, energy, or petrochemical industries, your projects likely need the expertise of highly skilled professionals every day. And these people not only need to be technically competent - you'll also want them to be productive while slotting seamlessly into your organisation without disrupting your existing team.
And which construction contractor or oil and gas operator doesn't want multi-skilled project staff? Quantity Surveyors who can also turn their hand to estimating and vice-versa and, at the same time, be experts in preparing and managing claims and negotiating accounts. Or Planners who can create credible programmes while being fantastic in client-facing roles, adept at writing excellent reports and skilled at quickly quantifying delay.
Hiring criteria in our industries can quickly become narrowed, leading to an increased CPH and - for that eventual new-hire - a feeling of overwhelm from day 1. All of which leads to high rates of absence, stress, unhappiness and eventually turnover.
And so the cycle starts again.
The Payback Period
The thing about hiring though, is that there is eventually a payback in productivity terms. It's just a matter of employers waiting it out - often for quite a while.
A newly-hired mid-level manager needs to have been working with your company for a period of six months before the CPH for that employee will have been worth it.
Research by Harvard Business School found that the average mid-level manager takes 6.2 months to hit their break-even point (or "BEP"). Which basical