Innovating Leadership:
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Hosted by Maureen Metcalf

Conversations with global thought leaders on leadership, culture, and innovation—designed for executives navigating complexity and building resilient organizations.

Retaining Is Cheaper than Recruiting: Recruiter.com’s CEO on Hiring for Keeps

Episode Description

Evan Sohn puts hard numbers behind a simple truth: in what he calls the Job Hopper Economy, keeping employees is far cheaper than constantly replacing them. He points to hiring costs that climbed to roughly $4,425 per hire, and far higher for executives, adding up to tens of billions in extra spending across the economy compared with pre-pandemic levels. His deeper argument is that pay alone no longer retains people, who increasingly want meaningful benefits, purpose, and a company with a conscience.

Key Takeaways

In the Job Hopper Economy, retention has become markedly more cost-effective than continuous recruiting.
Hiring costs rose to about $4,425 per hire, and roughly $14,936 for executive placements.
Accelerated turnover added tens of billions in extra hiring spending across the U.S. economy.
Traditional pay-focused retention no longer works, as workers seek purpose and companies with conscience.
Job mobility stayed resilient despite recession fears, with about 20 percent of workers planning to leave.

Why This Episode Matters

Executives come away with a clear cost case for investing in retention and purpose, rather than absorbing the mounting expense of constant rehiring.

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Featuring

Evan Sohn, Chairman and Chief Executive Officer of Recruiter.com

Episode Topics

Culture Change • Culture to Performance • Measurement & Evidence

Podcast Air Date

August 9, 2022

Episode Duration

48min

Watch the episode

Season 8

Episode Number 28

Episode Content:

Hiring for Keeps: The Rise of Recruiter.com

Evan Sohn, Chairman and Chief Executive Officer of Recruiter.com provided this article as a companion to his podcast, Hiring for Keeps: The Rise of Recruiter.com.

In 2019 the average cost to hire an employee was $4,129. In 2021 it was $4,425. Based on the BLS data the total cost to hire employees in 2019 was on average $24B per month. Given increased employee churn from the great resignation and the job hopper economy (which we are now calling “job mobility”), the May 2022 cost to hire was $4.6B more than the 2019 avg cost to hire. So far, the US Economy has spent over $25B more than in 2019 on hiring. We predicted in December 2021 that it would exceed $50B (over 2019 spend) and so far, we are tracking. (Note the avg cost to hire an executive is $14,936 so it is an even higher cost).

I saw this article about a survey from PwC and I could not believe it as it reported that despite a looming recession that 20% of their surveyed folks were planning to quit in 2022. Now keep in mind that the annual voluntary churn in the US was already around 20% but it ranges pre-pandemic from 12% in financial services to 80% in hospitality and retail. So 20% doesn’t really sound off any alarms to those who know the numbers but, it does show that job mobility might not be a deterrent with a recession.

We also keep hearing about “tech layoffs” almost on a daily basis. The Recruiter Index does show recruiting in the IT Sector to be as strong as May but flat in terms of Month over Month tracking.

It was our opinion that many of these layoffs were in fact a result of the over-hiring of employees that we reported on CNBC earlier in the year. The high-quality developers are still in demand and are fetching very high salaries.

We actually launched a new initiative to help companies build their OWN development teams outside of the US (mostly in LATAM). We are seeing a desire for US companies to invest in their own teams (as opposed to outsourced development organizations) but locate these folks (remote) in near-shore regions like LATAM. We are doing this without any placement fees. This is ideal for startups and high-growth companies seeking to hire awesome developer talent without the higher cost of today’s US software engineers or the markup of outsourced development companies.

So assuming there is a recession and it does not impact the job mobility of today’s employees what could you do about it? Here is a great article on the ways to retain your talent during these “interesting” times…and it is not just paying more money.

Resources:

Having trouble filling positions? Brace yourself: the Great Resignation is morphing into the Job Hopper Economy. Evan Sohn, the CEO of Recruiter.com, is in a unique position to see beyond the simplistic explanations of TV pundits. He joins host Maureen Metcalf to share his big-picture view of the state of hiring today…and where it will be tomorrow. Lesson 1: “Money solves all problems” is a pre-pandemic thought that no longer applies. Employees are looking further; in addition to equitable pay, they’re looking for meaningful benefits and companies with conscience. They want their hard work to contribute to more than this quarter’s P&L statement. And they’re willing to hop to the jobs that provide it. Or they job hop to maintain personal freedom and engagement. Whatever the reasons, the talent pool is changing – and your hiring and work culture need to change with it. Evan explains how, as he provides the history of Recruiter.com.

Other episodes you’ll enjoy

Lasting Solutions for Labor Shortages with Will O’Brien and Dave DuBose
What Leaders Miss in the Talent Shortage Myth with Doug McCullough
Why Top Talent Says “No, Thanks” to Leadership Jobs with Steve Dion

Guest(s):

Evan Sohn, Chairman and Chief Executive Officer of Recruiter.com

Guest(s) Bio:

Evan is the Chairman and Chief Executive Officer of Recruiter.com, an on-demand recruiting platform that combines AI and video job-matching technology with the world’s largest network of small and independent recruiters.

Transcript