How do you Calculate the ROI for Investing in Hiring?
We are in some uncharted waters when it comes to the labor market. Attracting and acquiring the talent that best fits your organization needs is more important now than ever. While the macro indicators are trending in the direction where the market will be more favorable for employers, we’re not close to there yet — especially since there are still around 1.9 open positions per job seeker.
Nearly every organization can make their hiring and talent strategies more efficient. How do you calculate the ROI for investing in making your organization better at recruiting, hiring and retaining valuable team members? Read more below about lowering costs, saving time, and minimizing risks.
Lowering Costs:
Using Sixth Sense Solutions Consulting powered by the Predictive Index (PI) lowers costs.
Talent acquisition and retention can be both costly and time-consuming. But using tools such as the behavioral data has helped hundreds of companies control those costs by more efficient matching of the candidate for the position.
For example:
- The average rate of turnover is >$15k per person.
- Sixth Sense powered by PI has helped clients reduce attrition by up to 20% YoY.
- A hiring failure can cost up to 3x that of a salary.
- The annual cost of a PI subscription is roughly one-third of
the cost of one bad hire (at $75k salary). 2-3X ROI - By saving the turnover cost of one bad hire at a $75,000 salary compared
to the annual cost of PI.
#2 Save time:
Sixth Sense Solutions Consulting coupled with PI saves time by bringing order to an often chaotic process, filtering candidates by behavioral targets (set according to the traits hiring teams know will lead to success in a role).
- The average time-to-fill rate is more than 40 days and many PI users have cut that figure in half – or more.
- Hiring teams that use PI regularly have a more productive recruitment pipeline, and conduct interviews
weekly, even daily, because their pipeline is updated. - Identifying the best internal team members for available roles.
#3 Minimize Risk
Taking the guesswork out of hiring gives business leaders peace of mind – and frees them up to focus on execution and results, knowing their talent strategy will bring in top performers.
- Quits are still up 23% since pre-pandemic.
- Behavioral data brings clarity to hiring, where Sixth Sense can help map your people strategy to your business strategy.
- Its application also fosters a consistent end-to-end
experience for hiring teams and candidates. - Scientifically validated, best utilized alongside a variety of other data points.
The Turnover Calculator is an interactive way to estimate the proven cost of
losing an employee. This tool takes the salary of a hire and estimates the
actual cost of losing the employee. Curious about your turnover costs or how to improve your recruiting, hiring and retention? Contact us to learn more today!