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The Increasing Cost of Hiring On Your Own

Posted by Bob Corlett on September 20, 2019

In metropolitan areas like Washington DC, it's become remarkably difficult to hire highly skilled employees and senior staff members. Trying to hire on your own has become more expensive than paying someone a fee to help you recruit. 

Here's why:

The news headlines might blare about future economic slowdowns or potential future recessions, but right now we have full employment (are you seeing any stories about layoffs from well-managed firms? No.) Quite the opposite, some organizations are hiring like mad.

So with low unemployment and fewer candidates actively looking for work, more employers are vying for the attention of fewer available and interested candidates. Consequently a few things happen in your recruiting process. Your job advertising will yield lots of candidates who are not remotely qualified (this is true in any economy) but far fewer candidates who are qualified. Next, when you try to schedule those few good people for interviews, you'll quickly discover that some of the best candidates will withdraw before the first interview because they already accepted a job offer from another employer. Or perhaps candidates accept a first interview with you but then decline a second interview.

To add insult to injury, the job advertising market itself is increasingly complex and fragmented because of all the competition between Google for Jobs, Indeed, Linkedin, Glassdoor, CareerBuilder and others. When you have a poor response to your job advertising, it's difficult to know whether you used the wrong job title, wrote an unappealing job description, posted your job in the wrong place, or maybe your job is just not as attractive to candidates compared to their other career options. All you see is who responded to your ad. You can never see who you didn't reach.  

When your recruiting process fails and you don't know why, a few predictable things begin to happen in your hiring practices. Perhaps, after a few months you finally make a job offer only to see it rejected. Or perhaps candidates accept your job offers, only to withdraw before their start date. Or maybe you have even hired someone who starts and then quits when they receive an even better job offer. This is increasingly common and it all stems from the same root cause - too many employers chasing too few available, interested, qualified candidates. But nothing is worse than lowering your hiring standards and ending up with a dud. Some desperate hiring managers mistakenly plow ahead and make job offers to the best of the people who showed up to interview, instead of holding out to find the best qualified people in the job market. When you lower your standards, you always pay the price later. Those "desperation hires" always create a management problem within their first year of work, and many of them also create legal problems on their way out the door (in addition to leaving bad reviews on employer reputation sites like Glassdoor.)

The long term view

Next year, you'll need to explain the choices you made this year. What would you rather explain?  Did you go under your salary budget because you left jobs vacant for 6 months, but as a result you did not meet your strategic goals? Did you hire on your own, use your full salary budget, but because you lowered your hiring standards, the new hires created management and legal problems that also distracted you from meeting your goals?

Wouldn't you prefer to have a better story to tell next year?  What if you chose to transfer the unspent money from your salary budget (about 2 months of salary from the unfilled position) to engage a search firm to quickly fill your open position with someone highly qualified? This would give you the best chance of both meeting your goals and staying within your overall budget.  (A word to the wise: If there is a future economic downturn, you definitely want to be the leader who was creative with their budget and met their strategic objectives. If layoffs ever do happen, the first people under the microscope will be the people who did not achieve their goals.)

How we are responding to this competitive job market

We run job advertising, but don't rely on it. We directly recruit (some say "poach") candidates. Compared to last year, we have to directly reach out to (recruit) 40% more people to create a robust slate of candidates (5-8 people moving forward into a first round interview). We know that more of those candidates will receive competing job offers during the hiring process than a year ago, so we take into account the candidates’ other career options, commute and cultural fit.

But happily, by working harder, we are not tempted to lower our hiring standards. As a result, our retention rates on placements is holding steady (85% of the people we place are still on the job after 3 years). And because we deliver a full slate of qualified candidates, we continue to encourage a rigorous hiring process. As a result, neither the candidate nor the employer feel like they are settling. 


We’re on one of the longest post-recession expansions in our economy’s history, and during the good times you will want to make as much progress as you can on your goals. But you also need to be prepared if the economy does tip toward a recession. You will want to be sure you have the best possible people who can adapt to changing external factors. Our core competency is finding and assessing candidates who can do well in both good times and bad. Unfortunately, simply posting ads and interviewing the people who emerge from that won’t help you do that. To succeed in this environment requires an intimate knowledge of the job market and how candidates make career choices.

To assess the impact of your own hiring practices, take a look at our Hiring Scorecard and then ask yourself if you wouldn’t rather get your jobs quickly filled with great people and have the security of our unconditional 18-month replacement guarantee.

Topics: Hiring Managers, Executive Search, Recruiting Executives