Recruiter.com Expects a $50B Increase Spent on Hiring in 2022
According to a recent report, the average cost per hire for non-executive employees in 2021 was $4,425 (up from $4,129 in 2019). For executive-level employees, the average cost per hire is $14,936.
With more and more people leaving their current jobs and looking for new opportunities, companies are experiencing this heavy price tag.
Since the COVID-19 pandemic, the job hopper economy has become more popular. Coupled with the Great Resignation, companies wonder if the economy will ever go back to normal. Will they have to invest more in hiring and recruiting new employees?
But with the job hopper economy, we will have a new normal. Keep reading to learn how this will impact your business.
The Job Hopper Economy
In the past, employees would start working for one company and stay there for 25+ years. Now, candidates only stay for one to two years before finding a new position.
“A recent report found that 60% of all millennials are willing to leave their job before the first year. With the rise of work from anywhere, hire from anywhere, and an easier interview process all done on the computer, there’s no reason for employees not to be looking for a better opportunity. Companies need to be thinking about having a constant stream of potential candidates to fill their workforce,” said Evan Sohn, CEO of Recruiter.com.
The job hopper economy is here to stay because the culture around employment has shifted. Part of that is due to the COVID-19 pandemic.
The COVID-19 pandemic made companies shift to remote working for the safety of the employees, but now 50% of employees are willing to take a 5% pay cut to keep working remotely.
Many employers are trying to force employees to return to the office, while employees want to find new jobs to continue working remotely.
In addition to that, working remotely has made it easier for employees to schedule interviews with other companies. They no longer have to take a fake sick day or sneak out in the middle of the day to attend an in-person interview.
It’s also now easier to hire from anywhere. More people have access to work in their dream job regardless of where they live. This has opened the doors for more people who are already re-evaluating their life post-pandemic.
In addition to that, many young people who graduated college at the start of the COVID-19 pandemic have likely never worked in an office before. Now, they don’t have the same loyalty to a business that employees used to have. Now, employees are more likely to chase the money and higher positions at other companies rather than climb one company’s ladder.
The Great Resignation is Making its Impact
Alongside the job hopper economy, the Great Resignation is also impacting companies. However, unlike the job hopper economy, Recruiter.com expects the Great Resignation to be over sometime in mid-2022.
The Great Resignation was causing an average of 3.9 million people in 2021 to quit because of government COVID-19 relief for unemployed people. People are also taking this time to re-evaluate their priorities and find a job that makes them happy and provides them with a good work-life balance.
However, once the COVID-19 relief money stops coming in and people find the job they want, the Great Resignation will slow down. After that, people will continue jumping around to new jobs for better opportunities. But instead of a tidal wave of people quitting, it’ll be smaller, steady waves.
However, if companies aren’t ready for this new normal of hiring, they could get swept away.
Impacts on Hiring
While most companies might be looking on the horizon and waiting for a break in the hiring waves, Recruiter.com anticipates this is the new normal.
While the end of the Great Resignation will slow down hiring, the job hopper economy will create the new normal of constantly hiring.
In 2018, with 150 million employees in the US economy, the average employee turnover rate was 22%. This resulted in 5.8 million people being hired monthly at an average cost of $4,129 per hire for a total monthly hiring cost of $24 billion. This percentage was increasing already in 2019 as people were leaving jobs more frequently.
However, this number will be even higher according to the macro changes in the economy discussed earlier. An increase in turnover to 28% or greater would mean that over 33 million people are hired each year.
With the 2019 average cost per hire at $4,425, that means the US will see a $50 billion increase in hiring costs in 2022.
What does this mean for employers? They’ll need to invest more money in recruiting and hiring. This is one of the reasons why we have seen a surge in hiring recruiters and talent acquisition professionals.
According to the earlier report, the average cost per hire for non-executive roles is $4,425, which goes towards recruitment expenses. That includes digital marketing, job boards, software technology for talent identification, screening software, internal and external resources (i.e. third-party recruiters), scheduling time, and lost productivity with open positions.
In addition to the hiring costs, companies are also having to pay 4.5% more for wages and salaries due to inflation and employees demanding higher salaries.
How to Plan for 2022
To keep up with this new demand in hiring, many companies are looking for ways to save money and hire quickly.
Thankfully, Recruiter.com can help with both aspects. We have recruiters that you can hire as needed to quickly and efficiently fill your open positions.
To help your recruiters find qualified candidates, we also have advanced software that delivers a talent pipeline directly to your email.
We’re here to help you navigate this new normal. Contact us today if you’re interested in incorporating our services into your recruitment process!
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