The hidden ‘taxes’ in talent acquisition

At a talent acquisition event last year, John Vlastelica, Founder of Recruiting Toolbox, and I got into a deep conversation about “recruitment taxes”—the hidden costs that TA teams often overlook. 

At Happydance, we spend a lot of time helping organizations optimize their careers websites to attract the right talent. But as John and I discussed, attracting candidates is just one piece of the puzzle. The real game-changer is reducing the hidden costs—these recruitment "taxes"—that drain resources and slow down hiring teams. 

John was so fired up about this concept that he turned our conversation into a blog post, breaking down the specific "taxes" TA teams pay and, most importantly, how to reduce them.  

His insights are a must-read for any talent leader who wants to make hiring more efficient, cost-effective, and candidate-friendly. So, without further ado, here’s John's take on the hidden taxes of talent acquisition. 
 

1. Taxes we pay = Extra effort  

Let me explore this idea a bit more. There are probably jobs that are super easy to recruit for, with lots of high-quality inbound candidates you don’t have to work hard to attract—they come through your career site or referral channels. Applicants apply to these jobs without much effort on your part (no “tax”) because you’re a very attractive employer to the talent interested in those kinds of jobs. 

The “tax” is paid in extra effort (ads, outbound sourcing, for example) that help us attract talent that wasn’t previously aware of us or interested in us.  

2. Taxes we pay = Hidden costs 

Here’s how my team and I think about these embedded costs, or taxes. All of them are very expensive.  

• The taxes we pay when we make offers below the market: lower close rates and longer time-to-fill. We save a little money in compensation but pay big taxes (more vacancies, longer time-to-fill, more overtime pay for existing teams, more attrition/backfills, lower quality hires, and sometimes larger recruiting teams that have to work three times harder to find and close talent that’s willing to work for below-market pay). 
• The taxes we pay in fat funnels—poor conversion from screen to interview to offer. Hiring managers are completely unrealistic on their target candidate profiles and hiring teams aren’t aligned on how to interview and select the right talent. This tax is one of the most expensive to the business, as fatter funnels means more interviewed candidates, which means 10, 20, even 30 more interviewer people-hours spent than is necessary. 
• The taxes we pay when recruiters spend time chasing feedback from interviewers and hiring managers because we don’t have regular, scheduled, structured hiring decision meetings or an ATS or interview intelligence tool that makes quick, quality hiring decisions possible. 
• The taxes we pay in lost finalist candidates because we involve too many interviewers, have too many unnecessary compensation approvals, and are therefore too slow to move top candidates from interview to offer. 
• The taxes we pay because our candidate experience stinks—in candidates who read our online reviews and never apply, in interviewed candidates who are turned off by their bad experience and drop out, in employees who refuse to refer quality people because they know their referrals won’t have a great experience, etc. 
• The taxes we pay in recruiting and attrition because our onboarding sucks and isn’t well led. 

I could go on. There are so many taxes we pay—in lost candidates, in costly vacancies, in interviewer, hiring manager, and recruiter people-hours wasted because our process is terrible. These are problems almost all of us face.  

What am I supposed to do about these taxes, John? How do I lower my tax burden?  

I say this a lot: No pain, no change.  

One of our biggest opportunities as TA leaders is to better articulate the cost of bad decisions, bad strategy, bad process, bad candidate experience. We have to bring the pain! 

We need to better capture the cost of the current state. The taxes we’re paying because we’re tolerating bad tactics, bad behaviors, order-taking recruiters, unrealistic hiring managers, and poor consequences or no consequences to the individuals who perpetuate the behavior that leads to big taxes.  

We can start by getting our recruiters to operate like talent advisors and push back on those hiring managers who want to do things that come with a high tax—like involving 12 people in the interview process for a midlevel role or going to offer with a salary well below market or wanting to see more candidates even though we’ve already presented a slate of five qualified, interested, available, affordable candidates. 
 

Frame your tax bill in terms your stakeholders will immediately grasp  

As TA leaders, we can and should work hard(er) to capture and surface the costs/taxes in terms that make sense to the stakeholders we need to influence. Hiring managers need to experience the tax (consequences to speed and quality); HR and compensation needs to see the impact to vacancy rates and speed and attrition; and our bosses need to see the trade-offs we’re making and taxes we’re paying now to fund the very expensive current-state tax rate. 

Is this easy to do? Yes, super easy.  

Just kidding.  

This is super hard. It’s why you make the big bucks. This is leadership. This is root-issue diagnosing, problem-solving, influencing, culture change, and a lot of tough conversations.  
 

But it’s worth it.  

Getting your tax burden down so that you’re freed up to do the really smart stuff that delivers more speed, more quality, and more diversity, while giving hiring teams time back, is the work of legends in our profession.  

Nobody wants to pay unnecessary taxes, right? 

At Happydance, we believe that an optimized careers website is one of the most effective ways to reduce these hidden recruitment taxes. By improving candidate experience, enhancing your employer brand, and making the journey to apply as easy as possible, you can significantly cut down on the costs John describes. 

Ready to lower your tax burden?  

Find out how a Happydance careers website can help. Speak to our team today.