Early talent is cost effective. Hiring an entry-level employee costs 130% less than a mid-level employee, and 180% less than one at the executive level. Employers that don’t have a dedicated early talent hiring strategy today will get left behind by an entire generation.
But is your early talent recruiting program cost effective?
Regardless of your company or team size, to figure out what it costs you to recruit early talent, don’t just look at your budget line items—think about your overall early career and campus recruiting strategy and goals. Without a strong grasp on the costs associated with each component of your strategy, it’s harder to prove your impact and return on investment.
By analyzing the buckets outlined below, small and medium employers (up to 500 employees) may be spending between $600K—$800K specifically recruiting early talent. This number could balloon to $30M annually for corporations recruiting large incoming classes of early talent (5,000+ hires). When factoring in all the time, effort, and resources to get early talent candidates from identification to productive employment, the costs can add up.
Consider these eight costs to optimize your early talent recruiting budget.
1. Event and career fair spend
It’s well known that traditionally campus recruiting includes career fairs, info sessions, workshops, and other activities. Handshake estimates that most companies might spend between 8-15% of their early-talent recruiting budget on expenses related to events across four major buckets: 1) people time costs, 2) travel costs, 3) registration costs, and 4) ancillary costs. So getting strategic with your approach to fairs and events can help maximize your return by developing the right school partnership strategy and ensuring strong attendance with messaging templates for events and fairs.
How to build a hybrid campus recruiting strategy
Handshake data found that 82% of career fairs during the spring 2023 recruiting season were in person, compared to 65% in 2022 and 38% in 2021. But that doesn’t mean that virtual career fairs are a relic of pandemic times.Learn more
2. Candidate interviews
Although the interview process is a critical part of the hiring process, time to hire is a substantial expense—with some estimates suggesting it now takes an average of 44 days to fill a job role. Handshake estimates the interview process could account for 12-17% of your early talent recruiting budget as far as time spent by interviewers on candidate pre-screens, hiring team calls, case study assessments, and onsite panel or 1:1 interviews. Considering early talent today expects an interview process that's 2 weeks or less, is this an area where you can streamline and cut costs?
3. Recruitment process outsourcing (RPO) or staffing agencies
If your company uses recruitment process outsourcing solutions (RPOs) to augment internal recruiting teams, Handshake estimates it can cost a whopping 35-50% of your early talent recruiting budget. This expense can quickly eat into your bottom line: while RPO and staffing agencies can be crucial in a pinch, they can become costly especially at larger scales. For example, some staffing agencies charge anywhere from 20% to 30% of a hired employee’s first-year earnings. Others might charge a retainer or fees related to a contracted period of time. Look at what your in-house recruiting team needs to scale before turning to a RPO for the bulk of your open reqs.
4. Recruiter & sourcer efficiency
It’s easy to assume that recruiters are the biggest expense in your early talent recruiting budget because it shows up most visibly on the cash flow statement. However, for many employers—especially smaller ones without dedicated teams—early-talent recruiter spend may only amount to 2-4% of total costs. Recruiter salaries could easily be outweighed by the time spent by senior hiring managers on screening and interviewing rather than on revenue-generating projects. Without the right tools that create efficiencies, talent teams could be spending a significant amount of time on individual outreach and candidate sourcing. Instead, you should reallocate your budget and time to more value-additive work—like nurturing candidates or developing a strong event strategy that stands out from the competition.
5. Organizational memberships
Organizational memberships can be a good way to both drive pipeline and develop your brand, especially for talent with niche backgrounds who may be hard to reach. Affiliations with national and local groups can send a strong signal of your dedication to equity and access, though they can have a material investment associated. Handshake estimates that most companies could spend up to 18-25% of their early talent recruiting budget membership fees. It’s important you are investing in the right places that maximize ROI based on your early talent goals, so assess with your team which memberships are providing the best value.
6. Tech tooling
HR and TA professionals often leverage technology to support every step of the recruiting process, from job marketing all the way through candidate tracking and onboarding. Handshake estimates that 3-4% of a company’s early talent recruiting budget might be directed to its HR tech stack. But only about half (49%) of HR professionals say their current stack adequately aligns with their organization’s business objectives, and even fewer (10%) say that their current tech stack does this extremely well. Recruiting teams should critically evaluate their tech tools and streamline wherever possible to save on costs.
7. Professional services & analytics
Turning to professional services, analytics teams, or third party data to guide your team to answer a specific question, solve a problem, or develop a strategy can result in a spend of around 3-4% of your total recruiting costs. Although the intention might be, for instance, to unlock areas of opportunity for sourcing talent with great data, the sources you use may not be the most effective at answering your questions about early talent. Discuss your intentions and assess the results to determine if there are more cost-effective ways to make smart decisions.
8. Job role advertising
These days, posting a job and waiting to see results no longer works. Handshake estimates that companies might set aside 2-3% of their recruitment budget to post and advertise to their incoming early-career talent. But are you promoting your jobs in the right places? Meeting your audience where they are is critical for driving overall brand awareness among early talent and can have a direct impact on application volume—not to mention a visible impact on your budget.
How much are you currently spending on campus recruiting?
While your specific “all-in” cost might vary depending on your company size and hiring goals, you can develop an early talent recruiting budget that delivers a pipeline of qualified applicants with the right amount of spend. How much are you spending on your incoming class?
To be cost-effective, your early talent recruiting strategy should meet students and recent grads where they are. Handshake is the #1 place where students and recent grads look for jobs. Contact us to learn more or build out your early talent financial ROI.
Facts and figures in this publication are sourced from a proprietary data model built by Handshake to help employer partners assess the financial impacts of their early talent programs. The model combines Handshake platform data, third-party sources, as well as figures provided by select Handshake partners to produce estimates across each of the eight different cost levers. Unless otherwise noted, all inputs leveraged in the model and report are based on data between March 2022 and October 2023.