The True Cost of Recruitment in Construction

According to the Building Cost Information Service, 10% fewer people are employed in the construction sector than before the COVID-19 pandemic.

To fill the much publicised skills gap in construction and meet government housebuilding targets, widespread recruitment is essential.

However, recruitment comes at a cost. Not just the obvious fees, but also the time taken to recruit and its impact on staffing levels and productivity during the recruitment process.

So, what is the true cost of recruitment? How can you mitigate hidden recruitment costs to avoid unnecessary expenditure and keep productivity on track?

Let’s take a look at some of the obvious and not-so-obvious cost implications for construction employers.

Recruitment agency fees: How much are you paying?

If you use a recruitment agency to find candidates for a role you will typically pay anything between 15% and 25% of the successful candidate’s salary. As such, for a £40,000 role you will pay somewhere between £6,000 and £10,000. Even for entry level recruits on £25,000 you will pay at least £3750.

An agency will have a large number of CVs and put as many candidates in front of you as possible to meet targets. This volume approach produces lower quality candidates and poor retention rates. It is also costly, both in fees and the time taken to whittle the CVs down to an interview list. Readvertising a post and duplicating the recruitment process doubles the initial outlay.

What if the candidate doesn’t work out? While some agencies will offer a percentage rebate if a candidate leaves, this is usually based on a sliding scale with a significantly reduced rate soon after the first few weeks of being hired.

Job boards: costs vs reality

Let’s take a look at the cost of advertising a role on a job board:

Indeed

If you’re hiring multiple candidates, you’re likely to create an indeed smart sourcing account which costs around £350 a month. In this professional account if you go over your limited contacts per month you have to purchase additional contacts at £3.20 per contact. Moreover, employers often find themselves locked into long-term agreements, with a three-month notice period required to leave.

Totaljobs: More Than Meets the Eye

At first glance, Totaljobs appears straightforward, pricing based on non-discounted CV browsing and job advertisements. But what’s not immediately obvious is unlocking the best rates requires committing to a long term contract, realistically the cost of a recruiter package offered by Total Jobs will cost you around the £300 – £400 mark per month).

LinkedIn Recruiter: A Premium Price Tag

If you’re considering LinkedIn Recruiter, the price of this product will depend on factors such as the number of licences you need and whether you pay per month, per quarter or annually. The cost of this around £400 – £500 per month.While it offers access to a vast talent pool, the costs can quickly spiral, making it inaccessible for many businesses.

While all job boards attract a large number of candidates, the critical question is whether those candidates represent the talent pool you are targeting for your specific role. Saturation can lead to low quality or irrelevant applications which take your time and resources to review. Likewise, job boards primarily attract active candidates while high quality passive candidates go under the radar.

The ease with which candidates can apply for jobs on job boards, and the lack of meaningful engagement, affects retention rates. Candidates may not be as committed to the role or as suitable as the employer expects. In 2024 the CIPD claims that over a quarter of UK employers had experienced being ‘ghosted’ by new starters on day one, and cited new research that highlights the importance of recruitment processes that are engaging and strategic.

The hidden time costs of recruitment

The time and resources allocated to recruitment have a direct impact on the cost of hiring new staff.

Tasks such as writing and posting job advertisements, processing CVs, scheduling and conducting interviews, and preparing and managing the onboarding process all cost time.

According to Reed.co.uk, the average Human Resources salary in the UK is £42,330 which is around £22 an hour. The cost of the HR Manager’s contribution to the recruitment process alone, including liaison with the leadership team and departments, can be calculated as follows:

• Writing the job description and advertisement, and posting the job – 5-10 hours
• Processing CVs – 5-15 hours
• Scheduling, preparing and conducting interviews – 5-10 hours
• Decision making and offer negotiation – 3-5 hours
• Preparing the onboarding and induction – 2-3 hours
• Managing the onboarding and induction – 3-5 hours

These 23-48 hours spent on each recruit cost between £506.00 and £1056. These costs would be better spent on revenue-gathering activities.

The impact of retention and success rates on long term costs

According to the Employee Retention Report, construction employees typically remain in their roles for 4.4 years, at which point the HR Manager costs are repeated to refill the role, along with the cost of advertising and posting.

A more strategic approach to hiring that involves access to top talent, meaningful engagement with candidates and a streamlined screening process will improve retention rates and keep costs manageable. Adopting a more holistic approach also reduces the number of poor hires and enhances productivity.

Why Strategic Resourcing is the smarter choice

Strategic Resourcing streamlines the recruitment process for construction companies, which saves time and money. Offering a uniquely tailored service for the construction, infrastructure and professional services industry, Strategic Resourcing is the ultimate targeted, results evidenced recruitment platform for the construction sector, offering the following benefits:

• Strategic Resourcing’s expert recruiters are restricted to uploading only three candidates per role. This saves users time sifting through hundreds of CVs
• We specialise in the construction sector, so users of our platform only receive CVs of handpicked, prequalified talent
• Using the Strategic Resourcing platform results in better retention rates due to its targeted approach
• Strategic Resourcing can be used to recruit for both temporary and permanent roles
• Users can upload an unlimited amount of vacancies
• No hidden costs such as sign-up fees or a fixed monthly fee
• Users only pay per placement

Find out more about how the Strategic Resourcing recruitment platform can save your company time and money

The true cost of recruitment using traditional job boards or agencies stretches far beyond standard fees. Time is a significant factor, the cost of which is often omitted from a recruitment plan.

Strategic Resourcing is your cost-effective and reliable, modern approach to recruitment across the construction sector. Our client, Sterling Services, said of the platform: We’ve mandated that we use Strategic Resourcing for moving forward to save time for all our senior management.”

Watch our demo to find out how the Strategic Resourcing platform works and how it can benefit your company by streamlining your talent acquisition while allowing your managers to dedicate more time to revenue-gathering activities. You can also download our brochure.