9 Cost-Effective Ways to Hire Employees in 2024

The costs of recruitment and hiring can quickly add up, with expenses like job postings, background checks, and candidate screenings. In fact, the cost of hiring an employee can be three to four times the position’s salary.

Therefore, finding cost-effective ways to hire employees can save your company money, ensure you’re attracting the right candidates, and prevent overspending on the recruitment process.

In this  guide, we’ll cover several cost-effective ways to hire employees and recruitment strategies to optimize your hiring costs by streamlining your processes.

1. Decide which type of workers to hire

Hiring costs can vary depending on the type of workers you need. These workers include:

• Freelancers and independent contractors vs. employees
• Full-time vs. part-time
• Remote vs. on-site

Understanding the different types of workers and their associated costs can help your company make informed decisions when building a successful team.

Freelancers vs. employees

The costs of hiring a freelancer vs. an employee can differ significantly. Hiring freelancers and independent contractors can be cost-effective for short-term projects or tasks. Companies typically pay contract workers by the hour or project, and freelancers often don't require benefits, bonuses, other perks, or a long-term commitment.

On the other hand, hiring employees typically involves more costs than hiring freelancers. This extra cost is due to the additional benefits they are entitled to, such as health insurance, paid vacation time, sick leave, and retirement benefits.

Whichever path you choose, be sure to classify workers appropriately. Misclassification can result in having to make back payments and facing fines and penalties.

Full-time vs. part-time

When hiring full-time employees, the cost associated with benefits can be high, typically about 30% of the total compensation costs. These costs can include health insurance, retirement plans, paid time off (PTO), life insurance, disability insurance, and tuition reimbursement.

Part-time workers can be a more cost-effective solution for businesses that don’t require a full-time commitment or have limited budgets.

According to the Affordable Care Act (ACA), full-time employment is defined as working 30 or more hours per week, which obligates employers to provide health benefits to their employees. Part-time employees typically work fewer hours each week and may not be eligible for the same benefits as their full-time counterparts.

Remote vs. on-site workers

Hiring remote workers can enable companies to save on office expenses like rent, utilities, and supplies. In addition, remote workers may reside in different regions or countries where the cost of living is lower, meaning they may be willing to work for lower wages.

The costs associated with maintaining a physical office space can be significant for businesses as they must pay for utilities and office equipment. Other expenses of maintaining a physical office space may include cleaning services, security systems, and insurance.

2. Consider rehiring

Rehiring is the practice of hiring former employees. Businesses can save money on recruitment and training costs by rehiring former employees, as the employees are already familiar with the company's culture and policies. They may also have retained significant technical expertise so training hours will be limited.

Onboarding for rehires can be significantly lower in time and resources needed as compared to new hires. The rehires may also require less supervision and can start being productive sooner, as they already have experience working for the company.

Keep track of employees who leave your company and gather information about their reasons for leaving as part of your exit interview process. You may want to contact employees who left on good terms to see if they’re willing and able to return.

3. Take advantage of referrals

Encouraging your current employees or freelancers to refer high-quality candidates can be a cost-effective way to streamline your hiring process. Your team has a deep understanding of your company's culture, values, and work policies, making them valuable judges of potential candidates.

An employee referral program can help minimize the need for expensive recruitment software and reduce the time and resources needed to hire new staff. In addition, referrals tend to be a better fit for your company culture and work environment and have a higher retention rate than other hires, saving you money on costs associated with finding and training new employees.

Employee referral programs typically offer incentives to encourage employees to refer high-quality candidates. The costs of these incentives are often small compared to the costs of recruiting new staff from scratch.

Incentives may include extra time off, bonuses, gift cards, or trips. The specific incentives and costs will depend on the company’s budget and the desired level of participation in the referral program.

4. Get your brand out there

Employer branding is a strategy that focuses on creating a positive and appealing company image that can naturally attract top talent. Showcasing the unique aspects of your workplace helps you differentiate your company from competitors. Build your employer brand using:

• Social media
• Website pages
• Worker testimonials

Social media

Employers can use social media to reach a large audience of job seekers at little to no cost. You can use popular platforms like LinkedIn and Twitter to post free job descriptions and connect with industry professionals. You may also post sponsored job ads that can reach an even wider audience at a cost ranging from $0.30 to $5 per click, depending on your budget.

Website pages

Organically attract top talent with a strong online presence that showcases your company culture, values, and job opportunities. Achieve a positive online brand through different web pages, such as career pages and about us pages.

Blogging

Having a blog on your website and publishing thought leadership articles on LinkedIn can help with branding and naturally attracting top talent in the following ways:

• Establishes leadership. Blogging and thought leadership articles can position your company as a leader in your industry, organically attracting top talent.
• Builds trust and credibility. Valuable insights and information in articles can show your knowledge and investment in your industry, building trust with potential candidates.
• Showcases company culture. Informational pieces can highlight your company culture and values, attracting candidates who align with your mission.

Careers page

A careers page is an efficient and cost-effective way to attract potential candidates. Add a careers page to your existing website to list as many job postings as you want without incurring the cost of recruitment software or the fees associated with job boards.

Additionally, a careers page can save human resource professionals and recruiters time by providing a central location for all job postings and information about the application process. This can reduce the time and resources spent managing multiple job postings across various platforms.

Corporate social responsibility page

A corporate social responsibility (CSR) page demonstrates your company's commitment to ethical business practices. This page can attract candidates who share the same values and are motivated to work for a company that makes a positive impact.

Aligning with candidates who share your company's values can improve employee satisfaction and reduce turnover rates. This saves on the costs of hiring and training new employees.

About us and mission pages

About us and mission webpages can help potential hires understand your company's history, values, and goals.

By clearly communicating this information, candidates can better determine if your company is a good fit for them. This can reduce costs associated with hiring and onboarding employees who don’t align with your company's mission and culture.

Worker testimonials

Worker testimonials can be a cost-effective way to show potential candidates what it's like to work for your company. These social proof references can help build trust and credibility with candidates and ultimately attract the right talent. Some ways to incorporate testimonials include:

• Video testimonials. Record short videos of employees talking about their experiences working for your company.
• Written testimonials. Collect written testimonials from current and former employees and feature them on your website.
• Social media shoutouts. Encourage employees to post about their positive experiences working for your company on their personal social media accounts.

5. Network

Networking can be a cost-effective way to hire employees because it relies on personal connections and referrals to source potential workers rather than costly job postings or recruitment software. Networking strategies include:

• Talent pipelines
• Alumni
• Industry groups
• Job fairs

Talent pipelines

A talent pipeline is a list of potential candidates a company has already established connections with, often through networking events, online platforms, or employee referrals. These candidates possess industry knowledge that could make them valuable additions to the company should a position become available.

Companies can save time and money by building a talent pipeline instead of sourcing candidates from scratch whenever a new position becomes available.

Alumni

Staying in touch with former employees or alums increases the potential for rehiring former employees who were successful at the company. Staying connected also provides networking and referral opportunities, all cost-effective ways to find new talent.

Here are some ways to keep in touch with alums:

• Maintain an alum network. Create an online platform, such as a social media group, where former employees can stay connected.
• Share regular updates. Keep alums informed about the company’s achievements, milestones, and any significant changes. You can do this through regular newsletters, email updates, or even a dedicated alum-focused section on the company’s website.
• Invite them to company events. Include alums in company events, such as holiday parties or industry conferences, to provide networking opportunities.

Former employees who had a positive experience at the company are more likely to recommend it to their networks, increasing the talent pool for new positions.

Industry groups

Networking with other professionals in your industry can be highly beneficial for building valuable relationships and connections with potential employees.

One great way to contact industry workers is by attending industry-specific events like trade shows, conferences, and workshops. You can also join industry-specific social media groups to connect with other professionals.

Online forums and discussion boards are also excellent sources of information and connections, providing opportunities to share experiences and learn from others in your industry.

Being active and engaged in these various networking channels can help you build relationships that could lead to hiring the right candidates for your company.

Job fairs

Job fairs are typically larger-scale events that bring together a variety of employers and job seekers in one location. Attending a job fair can be more costly than some of the other networking methods mentioned above, as it often requires travel, booth or table fees, and other expenses related to promoting your company.

That said, job fairs have several advantages. For one, they offer a unique opportunity to meet and network with a large number of potential candidates in a short amount of time.

Additionally, job fairs often target specific industries or job types, meaning the candidates you meet are likely highly qualified and relevant to your hiring needs. Plus, job fairs are particularly beneficial for connecting with recent college graduates seeking entry-level positions and are eager to launch their careers.

There are also some disadvantages to job fairs, however. For example, the cost of attending and promoting your company can be high, and there is no guarantee that you’ll meet candidates who are a good fit for your company.

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6. Create stand-out job postings

Attract talent that aligns with your company culture by making your job postings stand out on job boards.

You can start by writing a compelling job title that accurately reflects the role and catches the attention of potential candidates. Highlight your unique perks, company culture, and how you differ from the competition in your posting.

At the end, provide a clear call to action that encourages candidates to apply and makes the application process as easy as possible. This can include a link to your company website or an online application portal.

Include clear job descriptions

A clear job description can set expectations and prevent misunderstandings that could lead to turnover down the line.

When describing your company culture in a job posting, focus on the values most important to your organization to attract job seekers who share these values.

For example, if your company values work-life balance, you can mention any flexible scheduling options or remote work policies that you offer.

In addition, use clear and concise language that accurately describes the job requirements and qualifications. Identify must and want qualifications so candidates can self-screen.

You can also use keywords and industry-specific terminology in your job description to make it easier for candidates to find your posting.

Ask thoughtful assessment questions

Prescreen candidates efficiently and cost-effectively by adding assessment questions right in the application. Here are some preliminary questions a hiring manager can include in a job ad:

1. What experience do you have that makes you a good fit for this position?
2. What is your experience with [specific software or tools relevant to the job]?
3. What are your salary expectations for this role?

Including these types of questions in the job ad lets hiring managers quickly assess candidates to determine which ones to move forward in the hiring process. These assessment questions can also help save time and resources by filtering out unqualified candidates early.

7. Streamline application reviews

Streamline the resume review process to save time and prevent bad hires. Look for positive indicators and avoid certain red flags when reviewing applications.

Adopting tools like applicant tracking systems (ATS) can increase efficiency in filtering resumes and identifying top candidates. However, the potential downside of ATS is that it may overlook qualified candidates who don’t fit specific keywords or criteria.

Ensure you don't miss out on potentially strong candidates who may not fit certain ATS criteria by knowing what to look for and using your own judgment when evaluating applicants.

Look for green flags

Look for these green flags when reviewing an application:

1. Attention to detail. An applicant who pays attention to detail is likely to produce high-quality work. Look for correct spelling, grammar, and formatting in the resume and cover letter.
2. Easy-to-read resume. A clear and concise resume is easier to read and understand, which saves the reviewer time and effort. Look for a logical structure, headings, and bullet points.
3. Qualifications. Look for qualifications that align with the job requirements, such as relevant education and experience.

Avoid red flags

Here are some red flags for hiring teams to avoid:

1. Negative or unprofessional language. If the applicant speaks poorly about previous employers or colleagues, it may be a sign of a bad work ethic or a lack of professionalism.
2. Lack of relevant experience or qualifications. If the applicant doesn’t have the necessary skills or experience for the job, it may be a red flag that they won't be able to perform the duties required.
3. Poor communication skills. Communication is a crucial part of any job, and poor grammar, spelling errors, or unclear language in the application may indicate that the candidate is not a good fit.

8. Improve your interview process

Companies can use different types of interview processes to assess candidates' skills, experience, and fit with the company culture.

For example, behavioral interviews focus on how candidates handled past situations and can provide insights into their problem-solving abilities.

Situational interviews present hypothetical scenarios that candidates may encounter on the job and allow the interviewer to assess their critical thinking skills.

Video interviews can also be a valuable tool for streamlining the interview process. They save time for both candidates and hiring teams by eliminating the need for travel and allowing for more flexible scheduling.

A video interview can also provide a better sense of a candidate's personality and communication style than a phone interview, providing a better assessment of fit with company culture.

Ask the right interview questions

When conducting interviews for different work arrangements, consider asking questions relevant to the specific situation.

For example, companies hiring for a remote position may want to ask remote-specific questions (e.g., how they manage their time and stay motivated without direct supervision). On the other hand, companies hiring for an on-site position may want to focus on questions about teamwork and communication skills.

Behavioral questions are also useful in any interview to gain insight into how a candidate handled past situations. For example, "Tell me about a time when you had to handle a difficult situation with a coworker," or "Can you describe a time when you had to make a tough decision on the job?"

9. Improve your hiring process

Streamlining the hiring and recruitment process can save businesses money by reducing the time and resources spent recruiting, interviewing, and training new employees. An efficient hiring process enables companies to quickly identify and onboard high-quality candidates. This streamlined approach can result in a more productive and engaged workforce and a reduced risk of turnover and related expenses.

Create a hiring process flowchart to help all stakeholders understand their roles and responsibilities and to keep track of where you are in the process.

Reduce time to hire

Reducing the time it takes to hire an employee means less time the HR team spends on administrative tasks and more time focusing on other business areas.

Additionally, a shorter hiring process can save your company money since fewer hours will be spent on recruitment (e.g., advertising the job, reviewing resumes, and conducting interviews).

Companies can take several steps to speed up the hiring process, such as building a talent pipeline to maintain a pool of potential candidates, implementing ATS software to automate the screening process, and ensuring all team members involved in the hiring process are on the same page.

Use technology to streamline the application process

Using technology is one innovative solution to streamline the application process. For example, AI assistants reduce costs by automating time-consuming tasks like candidate screenings, freeing up valuable resources for recruiters. Additionally, AI assistants excel in matching qualified individuals to specific job positions, minimizing the risk of expensive hiring errors.

Another example involves incorporating QR codes into physical advertisements, providing a convenient way for prospective candidates to access job openings. By scanning QR codes, individuals can instantly access detailed job descriptions, application links, and other relevant information.

Find the best candidates on Upwork

Upwork provides a cost-effective solution for finding the best candidates for your business. With access to a vast pool of skilled professionals worldwide, you can post free job openings, review applicants' profiles and proposals, and communicate with potential workers to ensure they have the necessary skills and experience.

The platform also offers various features, such as time-tracking, invoicing, messaging, and project management tools, to help you streamline onboarding and manage your remote workforce effectively.

Utilize Upwork's platform to hire freelancers to find top-notch talent that fits your budget and project needs, all while reducing the cost of the hiring process.