Online recruitment helping in cost reduction in organizations

By Rajalakshmi Rahul on March 11, 2012

Online recruitment is identified as the most effective way to get more hires and best resumes. The annual cost to hire an employee through the internet is less whereas the average cost to hire an employee through traditional methods is high. The corporate recruiters can have their budgets reduced through online recruitment. Mondey (2009) argues that several organization cite cost savings as the major driver of online recruitment. The following are certain applications of online recruitment in reducing cost incurred by an organization in recruiting candidates for a vacancy:

Reduction in cost incurred on labor by reduction of process time

Online recruitment has automated and replaced paper based processes.  Automation of paper-based activities and replacement of paper based activities helped in the time taken in processing a resume and hiring a candidate. It has been estimated that, for a single transaction, such as change of address, online recruitment portals can save up to 1.03 hours of processing time which is equivalent to the labor cost savings of U$$17.74 per update in transaction in a data base in addition to U$$0.65 in distribution and material costs. This figure on multiplying with numbers of employees who want information to be updated, an organization with 10,000 employees can save up to U$$21.286 annually (Gary and Varkkey, 2010). This evidently proves how online recruitment contributes in cost cutting.

Reduction of cost associated with printing and distribution of materials

Online recruitment reduces cost associated with publishing, binding and printing manuals and distributing letters, forms, faxes, memos, benefit statements, reports, hand books and policy manuals. Considering the same example of updating an address, online recruitment portal has been estimated to save U$$0.65 for costs incurred in printing forms and mailing them(Smith, 2000). Moreover, the distribution cost is completely eliminated since all documents are available in the form of electronic data.

Improvement of revenue due to improvement in competence of the employee

Online recruitment portals with appropriate information help organizations recruit competent employees who could perform their jobs effectively and efficiently and act as a source for improvement of revenue of the organization (Ashwathappa, 2005).  This will result in increase in revenue per person to the organization thereby improving its overall profit.

Making the employees offer strategic or value added services to the organization

Online recruitment helps organizations to reduce processing time.  Besides, the number of employees from top management involved in recruitment process is also drastically reduced. This helps members for HR department to engage in other productive tasks thereby yielding strategic value to the organization.

These illustrations make it clear that online recruitment helps organizations reduce cost, save time; improve productivity and increase revenue.

References

  • Mondy R W (2009), Human Resource Management, Dorling Kindersley, New Delhi, p 98
  • Gary D and Varkkey B (2010), Fundamentals Of Human Resource Management: Content, Competencies And Applications, Pearson Education, New Delhi, p 89
  • Smith R (2000), Electronic resumes and online networking, Career Press, New Jersey, p 21.
  • Ashwathappa K (2005), Human Resource and Personnel Management, Tata McGraw Hill, New Delhi
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