Investing in an HRMS can make a significant financial impact in addressing the following recruiting inefficiencies: 

Higher Cost-Per-Hire - $5,000

• Increased time spent manually posting job ads, screening resumes, and scheduling interviews.
• Redundant efforts and wasted resources due to lack of centralized applicant tracking.

Estimated Calculation:

• Reduction in cost per hire:: $500 (from $4,000 to $3,500).
• 10 hires/year.
• $500 × 10 = $5,000 saved annually​​

Inability to Scale - $70,000

Manual recruiting processes become increasingly inefficient as your business grows. Tracking applicants, posting jobs, and managing communications manually leads to delays, higher costs, and the inability to handle an increasing volume of hires effectively. 

Estimated Calculation:

• Impact of Inefficiencies: Manual recruiting increases time-to-fill by 30% and cost-per-hire by 25%.
• Example for a Growing Business with 20 Hires Annually:
  • Average time-to-fill per role: 40 days (manual process).
  • Increased time-to-fill: 40 days × 30% = 52 days.
  • Cost of extended time-to-fill: $1,000 in lost productivity per role × 12 additional days × 20 hires = $20,000 annually.
  • Increased cost-per-hire: Average $10,000 × 25% = $2,500 extra per hire × 20 hires = $50,000 annually.

Total Annual Cost Due to Lack of Scalability: $70,000.

Missed Top Hires - $10,333

• Top candidates may drop out of the process due to delays or lack of timely communication.
• Limited ability to identify and target high-quality candidates efficiently.

Estimated Calculation:​

• Role Revenue Contribution: A sales role generates $100,000 annually. Losing a top candidate delays filling the role by 1 additional month.
• Revenue Lost: $100,000 ÷ 12 months = $8,333 in revenue lost per month+ $2,000 (extended recruitment costs) = $10,333 per top candidate lost.​

Lost Productivity - $83,250

Unfilled positions strain existing teams, resulting in overburdened employees, reduced productivity, and missed revenue opportunities. Additionally, managers and HR staff spend excessive time on recruitment, diverting focus from strategic initiatives.

Summary

Negative Employer Branding - $10,000

Your recruiting process is a candidate’s first impression of your company. A clunky job portal, poor communication, delays, and inconsistent follow-ups can make your business seem unprofessional and unappealing for "A" players.  A tarnished employer brand reduces your ability to attract top talent. Negative candidate experiences often lead to bad word-of-mouth or public reviews, deterring other qualified applicants. This results in negative employer branding, higher recruiting costs, extended time-to-fill, and missed opportunities to secure the best candidates.

Estimated Calculation:

• Impact on Candidate Pool: A poor employer brand may reduce applicant volume by up to 30%, increasing cost-per-hire by 25%.
• Example for a 10-Hire Business:
  • Average cost-per-hire: $4,000.
  • Additional cost due to damaged employer brand: $4,000 × 25% = $1,000 per hire.
  • Total additional costs for 10 hires: $1,000 × 10 = $10,000 annually.

Increased Turnover & Bad Hires - $18,000

Manual HR systems burden teams with administrative tasks, leaving little time for strategic activities like analyzing hiring decisions. Without reporting and data insights available with an HRMS, poor hiring decisions become more frequent, increasing turnover and the associated costs of rehiring, training, and lost productivity.

• Cost of a Bad Hire: (e.g., replacement, training, lost productivity) ÷ likelihood of a bad hire due to inefficiencies.
• 30% of the annual salary for a $60,000 position = $18,000/bad hire.