What gives software for recruiting money

For more than 10 years there have been and appear all sorts of professional systems for staff recruitment. It `s naturally. Specialized software has already been developed for many individual professions. As for recruiting, everyone understands what tasks software helps solve, which routine and errors it relieves, but no one understands how to measure the economic effect of using it. In other words, companies can calculate how much money software will cost, but they do not understand ROI or how much money software will bring or save. Slogans like “Close vacancies 2 times faster with (such and such software)” - this is from a flashlight, it's just not true.

Misunderstanding what software gives for recruiting in money leads to the fact that companies postpone this investment for years and during this time lose a lot in the results.

I decided to calculate how much money and time is saved by professional software for recruiting. In order not to load you with detailed calculations, I will begin immediately with the results obtained. And who is interested in digging deeper, detailed calculations are described below.

So here are my results.

Using professional recruitment software you:

• save time 2 months and 1 week per year for each recruiter .
• save money - the equivalent of 2.24 average recruiter's salary per year . In April 2019, this is an average of $ 2,688 - for the IT recruiter in Russia, $ 1 904 - for Ukraine, $ 1 680 - for Belarus, $ 1 232 - for Kazakhstan.
• ROI with investment in recruiting software is about 390% .
• for complex, highly paid positions, the benefit for the employer will be on average from $ 2,184 to $ 4,872 per year for each recruiter, depending on the country;
• for less paid, quickly closing positions, the benefit for the employer will be on average about $ 1,680 to $ 2,240 per year for each recruiter, also depending on the country;
• every 5 vacancies a recruiter will be able to close with the help of his base, this is 54% faster than when searching for new candidates.

Calculations

Get comfortable and get down to detailed calculations. I decided to sort out the recruitment of people “by bone” in order to get a visual idea of ​​what and in what volumes the recruiter has to do.

How software helps save 2 months and 1 week per year

On average, one recruiter spends about 33 hours on processing a job without using software. It was not easy to count. We interviewed colleagues and also analyzed in detail the norms and standards in the profession.

To hire a qualified employee for an office position, you need to perform a certain list of actions, while some of them are one-time and others need to be done daily. In most cases, to close a standard vacancy, if you actively engage in this, it is possible in a period of 10 days to 3 weeks. For calculation, take the average: 15.5 days. At this value we will multiply all the daily work. The duration and number of individual actions we take from the standards established by experts empirically (for example, like this). For all calculations, we use the arithmetic average of the minimum and maximum values ​​- it is closest to real conditions with the likelihood of a variety of abnormal situations.

Let's compare the time costs of one recruiter for each stage of selection without software and using software, and calculate the real savings.

If we add up the duration of all the individual elements of the recruiting process (calculated by the average values), it turns out that the hiring specialist spends almost 32 hours and 48 minutes on the “manual” selection of one employee. Considering the time spent on closing the same vacancy, but using the capabilities of the recruiting system, the time for all the necessary tasks was reduced to 28 hours and 24 minutes. That is, the closure of 1 vacancy is accelerated by 4.4 hours.

According to statistics, a recruiter handles an average of 5 vacancies per month. Using the software, he gets a very valuable bonus - this is the “pumped” internal database of the resume. Of course, closing vacancies from the internal base is much faster, this is a dream. I decided to find out how much such accelerated hiring turns out and for how long.
For this, we obtained data on closed vacancies in the CleverStaff system for 2 years. It turned out that on average 4 out of 5 hiring is a new candidate, and every fifth hired employee is a candidate from the internal base and such vacancies close 54% faster. On average, there is a saving not received earlier 4.4 hours, and already 15.3 hours.

Go ahead. If a specialist works at standard 176 hours per month, then the total saving of working time is:

(4 vacancies × 4.4 hours) + (1 vacancy × 15.3 hours) = 32.9 hours per month.
32.9 hours of savings / 176 working hours per month = 18.7% of working time per month.

In recalculation for a year it is:
18.7% × 12 months = 2.24 months or 2 months and 1 week

This indicator is universal and applicable to the work of a recruiter in any country and with vacancies of any complexity. Let's see: how does such a reduction occur?
This is possible due to the fact that professional software optimizes such time-consuming processes:

• Job posting - the system itself generates the external job page from the data entered into the database. If you add to the text of a job posted on a special resource, a link to the external job page generated by the software, applicants will be able to respond to the job directly on it, which is convenient, since The responses immediately go into the system, and their summaries - into the database.
• Save all relevant resumes from the job search candidate database. Professional systems have integration with the most popular platforms for employment, which means that users can add candidates from these resources to their own database in 1 click, i.e. right in the process of screening search results.
• Saving resumes of applicants who come to the post and to the accounts on the sites for posting vacancies every day. Parsing resumes from the mail is carried out once a day. If the description of a vacancy on third-party sites adds a link to the external page of a vacancy generated by the system, candidates can send their responses from it, i.e. immediately added to the database and appear in the vacancies at the “Found” stage.
• Notice of refusal is not suitable candidates. Using the software, this can be done directly from the system interface: the system will substitute the candidate's name into the template.
• But the main thing is the formation of a working base of candidates, due to which an experienced recruiter will be able to close vacancies without external sources.

How much money?

Everything related to financial performance can vary considerably. The salary of both the recruiter himself and the candidate he is looking for depends on the country, the size of the company, the budget of the department. Therefore, here I turned to the average indicators, which are usually found in professional studies. So, according to statistics, the average salary of a Russian IT recruiter per month is $ 1,200. In turn, the average salary of a Ukrainian IT recruiter per month is $ 850 (according to EvoTalents ), Belarusian - $ 750, and Kazakh - $ 550. Hereinafter, I took all the data on the amount of wages from publicly available vacancies on such resources as hh.ru, hh.kz and the like.

I correlated this figure with the saving of working time - 2 months and 1 week per year (this = 2.24 months), which we received earlier.

• For Russia - $ 1200 × 2.24 months = $ 2 688
• For Ukraine - $ 1 904
• For Belarus - $ 1,680
• For Kazakhstan - $ 1 232

These amounts are an average savings on the salary of each recruiter per year. To be more precise, the recruiter will do additional work with this amount if he uses a professional system.

Additionally, it is still possible to calculate the benefit for the employer from additional hiring, which is equal to the lost profit from hiring one month later. We assume that the company earns 50% of the amount of his salary from the employee’s work. I think this amount can not be less, taking into account taxes, rent and other expenses. Therefore, I consider 50% of the salary - this is a modest, minimum estimate of how much a company earns on the work of an employee.

Now we calculate how much is 50% of the average salary fund of hired employees for 2 months and 1 week. According to statistics, the average senior IT specialist’s salary is 2 $ 2,700 for Russia and 〜 $ 2,900 dollars per month for Ukraine, 〜 $ 2,400 for Belarus and 〜 $ 1,300 for Kazakhstan.
One recruiter on average closes 1.5 challenging jobs per month.

We calculate the profit according to the following formula: average salary × number of vacancies per month × 2.24 months × 50% gain.

• For Russia: $ 2,700 × 1.5 vacancies per month × 2.24 months × 50% gain = $ 4,536
• For Ukraine: $ 4,872
• For Belarus: $ 4,032
• For Kazakhstan: $ 2,184

In total, for complex, highly paid positions, the amount of benefit is from $ 2,184 to $ 4,872 per year for each recruiter.

The average salary of a specialist in a position that closes quickly is approximately $ 540 for Russia and $ 400 for Ukraine, $ 350 for Belarus and $ 300 for Kazakhstan. Such positions recruiter in a month closes about 5.

• For Russia: $ 540 × 5 vacancies per month × 2.24 months × 50% gain = $ 3 024
• For Ukraine: $ 2,240
• For Belarus: $ 1,960
• For Kazakhstan: $ 1,680

Total, for less paid, quickly closing positions, the sum of benefits - from $ 1,680 to $ 2,240 per year for each recruiter.

Let me remind you that I summarized the results at the beginning of the article.

Does your company need recruiting software?

This is a purely business question. It is better to make a decision not intuitively or emotionally, but on the basis of data. I suggest using an example to calculate the amount of benefits from the introduction of software for a team of 4 recruiters. For example, two with salaries of $ 700, one - 850 and one more - $ 1100. The monthly payroll of this team is $ 3,350.

For example, software costs $ 40 per month for each recruiter. This is quite a market option.
For the year, the cost of software is 40 × 4 × 12 = $ 1 s.

According to my calculations above, the software will save 2 months and 1 week for each recruiter per year. For our team of 4 recruiters, this will be exactly 9 months (out of a total of 48 working months per year). In money, this means the work done in the amount of the team’s payroll fund is multiplied by 2 months and 1 week:

• $ 3,350 × 2.24 = $ 7,504.

In fact, 9 working months of savings for your company will mean one of the following scenarios:

• 4 recruiters close more vacancies, as if they were helped by the 5th recruiter for 9 months a year.
• The load for each recruiter decreases and you only need 3 recruiter, instead of 4.

That is, with the software 4 recruiter will perform $ 7,504 more work per year. If you do not have this extra job, then you are reducing one recruiter and saving $ 7,504 per year. If you have enough vacancies for them, then you save $ 7,504 per year without hiring the 5th recruiter, and his work is done without increasing costs. The cost of such savings is the cost of software ($ 1,920 in our example), so the net savings would be 7504 - 1920 = $ 5,584.

ROI = Amount of savings / amount of investment (software costs) = 7,504 / 1 920 × 100% = 391%.
Simply put, in our example, investment in software will be repulsed 4 times within 1 year.

For your company, you can repeat my simple calculations, substituting:

• Your number of recruiters,
• Their annual payroll,
• The cost of your recruiting software,
• Average vacancy time in your company,
• The average number of closed vacancies per month.

In my estimation, if your recruiters are well-staffed, then with different values ​​of these variables, ROI can be in the range from 300% to 500%.

You can also estimate the value of the hired employees for 2 months and 1 week for each recruiter. According to my calculations, this increases the ROI by another 2.5 times.

The use of professional software by recruiters is no longer a controversial issue and not a dilemma. This is a global trend, which will include all serious companies sooner or later.
I hope my calculations and results will help your companies decide on professional recruiting software and it will pay off for you no less than in my calculations :)