Improve margins and reduce operational costs in blue collar labour hire with automation
Mitchell Davis
Founder
Blue collar labour hire agencies face many challenges:
- Low margins: the roles being filled by a successful candidate only generate a few dollars per hour in revenue.
- High competition: candidates will go to the fastest agency that can get them working right now with the least effort required.
- High turnover: retaining skilled blue-collar workers can be difficult, leading to a constant need for new hires.
- Manual effort: manual recruitment processes, such as screening resumes and conducting interviews, can be time-consuming, inefficient, and expensive at high volumes.
- Lack of real-time visibility: managing many candidates at high volumes makes it difficult to know where any given candidate is on their registration and onboarding journey.
As an agency grows by gaining more customers and filling more roles, the recruiter headcount must also increase. Each role could receive hundreds of applicant submissions, requiring significant recruiter time to assess, screen, interview, register, onboard, and train successful candidates.
Example referral workflow
Let’s take a look at an example referral workflow for a scenario where a client needs 5 labourer positions filled as soon as possible. For this example we will say there were 50 candidates that initially applied.
Before RecruitKit
| Stage | Candidates | Minutes / Candidate | Total Minutes |
|---|---|---|---|
| Review resume/cover letter (20% drop off) | 50 | 2 | 100 |
| Scheduling phone screening (5% drop off) | 40 | 2 | 80 |
| Phone screening (20% drop off) | 38 | 10 | 380 |
| Request documentation (5% drop off) | 30 | 2 | 60 |
| Review documentation (20% drop off) | 29 | 10 | 290 |
| Scheduling interview (5% drop off) | 23 | 2 | 46 |
| Interview | 22 | 20 | 440 |
| Extend offers | 5 | 5 | 25 |
| Scheduling training | 5 | 10 | 50 |
| Total Minutes | 1,471 | ||
| Total Hours | 24.5 |
| Stage | Candidates | Minutes / Candidate | Total Minutes | Drop Off Rate |
|---|---|---|---|---|
| Review resume/cover letter | 50 | 2 | 100 | 20% |
| Scheduling phone screening | 40 | 2 | 80 | 5% |
| Phone screening | 38 | 10 | 380 | 20% |
| Request documentation | 30 | 2 | 60 | 5% |
| Review documentation | 29 | 10 | 290 | 20% |
| Scheduling interview | 23 | 2 | 46 | 5% |
| Interview | 22 | 20 | 440 | |
| Extend offers | 5 | 5 | 25 | |
| Scheduling training | 5 | 10 | 50 | |
| Total Minutes | 1,471 | |||
| Total Hours | 24.5 |
Every hour that a recruiter manually spends registering and onboarding candidates costs your business approximately $35, based on an average salary of $70,000.
Based on the above example scenario, the total spend in recruiter time is $858. Assuming an average $2 hourly margin, each of the 5 successful candidates will need to work 86 hours, or just over 2 weeks full time, before the business starts making a profit on the registration and onboarding costs for all candidates - successful or not.
Automation will significantly reduce these operational costs and help the business make a profit much faster. Taking any of the manually intensive tasks in the workflow away from recruiters and making them automated, including screening, capturing documentation, and training, can cut the registration and onboarding cost by half.
After RecruitKit
| Stage | Candidates | Minutes / Candidate | Total Minutes |
|---|---|---|---|
| Review resume/cover letter (20% drop off) | 50 | 0 | 0 |
| Scheduling phone screening (5% drop off) | 40 | 0 | 0 |
| Phone screening (20% drop off) | 38 | 0 | 0 |
| Request documentation (5% drop off) | 30 | 0 | 0 |
| Review documentation (20% drop off) | 29 | 4 | 116 |
| Scheduling interview (5% drop off) | 23 | 0 | 0 |
| Interview | 22 | 20 | 440 |
| Extend offers | 5 | 5 | 25 |
| Scheduling training | 5 | 0 | 0 |
| Total Minutes | 581 | ||
| Total Hours | 9.7 |
| Stage | Candidates | Minutes / Candidate | Total Minutes | Drop Off Rate |
|---|---|---|---|---|
| Review resume/cover letter | 50 | 0 | 0 | 20% |
| Scheduling phone screening | 40 | 0 | 0 | 5% |
| Phone screening | 38 | 0 | 0 | 20% |
| Request documentation | 30 | 0 | 0 | 5% |
| Review documentation | 29 | 4 | 116 | 20% |
| Scheduling interview | 23 | 0 | 0 | 5% |
| Interview | 22 | 20 | 440 | |
| Extend offers | 5 | 5 | 25 | |
| Scheduling training | 5 | 0 | 0 | |
| Total Minutes | 581 | |||
| Total Hours | 9.7 |
Under this scenario, the total spend in recruiter time has dropped to $340, and each of the 5 candidates now needs to work just 34 hours, or less than 1 week full time, before they return a profit.
How to achieve 10-20x ROI with RecruitKit
Automation will help your business grow faster and more efficiently. Each recruiter can now effectively manage more than twice as many candidates due to significantly decreasing the time taken to register candidates. You just increased your capacity to scale by over 200%.
Your business could choose to reduce recruiter headcount to compensate for the higher efficiency, or it could choose to reallocate those team members to more revenue generating roles, like business development.
RecruitKit can help your business with the following aspects of registration:
- Reviewing applicant resumes and cover letters
- Automated screening
- Interview scheduling
- Capturing documentation, payee details, tickets and licences, references, and any of your custom forms
- Police checks
- VEVO checks
- Training/e-learning
With real-time visibility and insights, all of this information is automatically forwarded into your HRIS, maintaining a single source of truth with no manual effort by your team.