however, sometimes there are indirect costs, or opportunity costs,
which need to be taken into account. Opportunity costs are those
costs incurred as a result of the reduction in productivity that may
be expected when either a new recruit takes over from an experi-
enced employee or when a situation is left vacant for a period of
time. It is estimated that costs of up to 30–50 per cent of an
employee’s annual salary are accumulated in lost production and
expenses incurred in finding a replacement.^3
Given that the costs of recruitment are so high, it is becoming
increasingly important not only to find employees who have the
necessary skills and competencies and are able to match the profile
that the company endeavours to portray to their customers, but who
are also able and willing to be retained by the company. This whole
process, therefore, starts with managing the recruitment process
and ensuring that the best employees are employed first time.
Finding the best employees
There are a whole range of recruitment channels available to
employers who are trying to find the best employees for their organ-
ization. A good starting point for looking for potential employees is
from within the organization. This method, though not commonly
used by employers, is particularly attractive because these recruits
already have a relationship with the company and, by being more
familiar with the company, are more likely to be retained than those
acquired through agencies. Another underutilized channel which is
often worth pursuing when a situation cannot be filled from within
the company is through referrals provided by existing employees.
These potential employees are also more likely to be retained by the
company than those obtained via other channels. Both these
options, particularly the first one, are very cost effective, as the costs
which would normally be incurred through advertising and the
administration of numerous application forms can be avoided.
A 1996 IRS Survey into policy and practice in recruitment identi-
fied the most successful recruitment channels by job type based on
a survey of 165 employers across a number of different industry
sectors.^4 In terms of identifying the best recruitment channels by job
type the survey asked respondents which recruitment channel they
used for each of seven job types. For apprentice/youth training
vacancies, the most commonly used recruitment channel is through
306 Relationship Marketing