Risks employers face if paying too little per application when hiring for construction and skilled labor jobs

When employers in construction and skilled labor jobs pay significantly less than the industry rate of $28 per application, they risk receiving a lower caliber of candidates. Cheaper sources may drive applicants from unreliable channels or incentivize unqualified candidates to apply simply to meet volume targets. This leads to an increase in irrelevant or underqualified applications, forcing hiring managers to spend more time sorting through them. The reduced cost per lead can quickly lead to inefficiency in the hiring process, as recruiters are faced with the challenge of identifying genuine talent among a sea of unqualified candidates.

Additionally, paying less than the prevailing rate can expose employers to fraudulent leads, where bots or fake applicants inflate the number of applications. These deceptive practices distort recruitment metrics, giving the impression of a successful campaign based on sheer volume rather than quality. As a result, employers may believe they are saving money, but in reality, they are expending more resources on screening, and the quality of hires may suffer. Over time, this could impact not only the efficiency of the hiring process but also the safety and performance of job sites, where qualified, skilled labor is critical.

Data gathered from hundreds of job boards shows that the effective cost per application when employers advertise a job is $28 if the job function is construction or skilled labor. What quality and other risks do employers face if they pay a small fraction of the going rate to a vendor for these leads? Here is what eight thought leaders have to say.

• Lower-Quality Leads Impact Project Efficiency
• Cheap Leads Result in Costly Mistakes
• Risks of Low-Cost Applicant Sourcing
• Brand Damage from Unreliable Lead Data
• Hidden Costs of Inadequate Candidate Filtering
• Fraudulent Applications from Discounted Leads
• Lower-Priced Leads Reduce Workforce Quality
• Safety Risks with Unvetted Construction Workers

Lower-Quality Leads Impact Project Efficiency

In construction or skilled labor, paying less than the $28 norm typically means lower-quality leads. This was evident during a past hiring phase at CrownTV, where a cheaper approach brought in candidates lacking the necessary experience, leading to multiple rounds of interviews. Quality matters here, as skilled labor roles are the backbone of many projects. Skimping on costs can result in delays, higher turnover, and even safety risks. Quality talent ensures projects are completed efficiently and safely.

Alex Taylor, Head of Marketing, CrownTV

Cheap Leads Result in Costly Mistakes

At Rowlen Boiler Services, we’ve learned the hard way that cheap leads often mean sub-par applicants. I’ve seen firsthand how unqualified workers can botch installations, leading to costly repairs and damage to our reputation. Just last month, we had to redo an entire heat pump system because of a poorly vetted technician. Quality applicants are worth the investment – it’s better to pay more upfront than to risk our customers’ safety and satisfaction.

Lara Woodham, Director, Rowlen Boiler Services

Risks of Low-Cost Applicant Sourcing

When employers pay a small fraction of the going rate, such as significantly less than the $28 per application benchmark for construction or skilled labor roles, they face several quality and operational risks. One major concern is the quality of applicants. Low-cost vendors often do not invest in targeted job placement, meaning the job postings may not reach qualified or experienced candidates. This can result in a high volume of unqualified applicants, leading to wasted time and resources in screening resumes that don’t meet the essential criteria for skilled labor positions.

Another risk is limited exposure. Lower-cost vendors may not post on reputable or high-traffic job boards frequented by skilled labor professionals, reducing the pool of quality applicants. As a result, employers may struggle to fill roles with competent workers, which can delay projects, reduce productivity, and increase the burden on existing staff.

There’s also the issue of poor candidate experience. Cheaper vendors may not provide strong support or applicant tracking systems, leading to inefficient communication with candidates. This can discourage potential skilled laborers from completing the application process, further limiting the talent pool.

Lastly, paying below-market rates increases the risk of compliance and legal issues. Vendors who offer cut-rate services may not follow proper industry standards or labor laws, potentially exposing employers to legal liabilities, especially in roles with safety or certification requirements.

Steven Mostyn, Chief Human Resources Officer, Management.org

Brand Damage from Unreliable Lead Data

Paying a fraction of the going rate for leads is a risky gamble that can severely damage your brand’s reputation. In my 17 years of experience, I’ve seen companies struggle to recover from the fallout of unreliable data. Low-quality leads not only waste time but can also lead to negative reviews and lost trust in the construction industry. At Wild Creek Web Studio, we’ve helped clients increase leads by fivefold while maintaining quality, proving that cutting corners on lead generation is never worth the potential harm to your business.

Praveen Kumar, Founder, Wild Creek Web Studio

Hidden Costs of Inadequate Candidate Filtering

Every time employers attempt to get that cheap, they’re rolling the dice, and often, the risks aren’t talked about or understood. But one little-discussed risk is the quality of candidate filtering. Because when you go cheap, those vendors often don’t have the resources to properly filter candidates before sending them your way. So you’re getting waves of subpar applicants, but the worst part is, you’re also passing on the best talent because the filtering was poor and rushed. You might as well be casting a wide net.

And what’s subtle and dangerous about this is that it can create a huge drain on time for your hiring team—your hiring team is sifting through hundreds or thousands of resumes that are not even remotely like what you’re looking for, did not have the right workflow set up for it, is getting your hiring wrong, and is costing you with respect to attrition and the people that you have to bring back in for a search because it went bad. So what might seem like an easy place to save on that upfront cost can end up costing you a heck of a lot in the long run with the investment of time and lost opportunity.

Kyle Kozlowski, Co-Founder, Eco Temp HVAC

Fraudulent Applications from Discounted Leads

When employers opt for significantly cheaper job leads, they risk attracting low-quality candidates. Vendors offering discounted leads often cut corners in their sourcing methods, resulting in a pool of unqualified or mismatched applicants. Consequently, employers may waste valuable time and resources sorting through numerous resumes that fail to meet their criteria.

Moreover, cheap job leads also increase the likelihood of fraudulent applications. Vendors who offer unrealistically low prices may resort to unethical practices such as submitting fake resumes or communicating with non-existent candidates. This can be detrimental to an employer’s hiring process and reputation.

In addition, paying a below-market rate for job leads can also damage the employer’s brand image. Candidates who come across these job postings may perceive the company as cheap or not valuing their employees, leading to a negative perception of the organization. This could potentially impact the company’s ability to attract top talent in the future.

Zach Shepard, Principal, Braddock Investment Group Inc

Lower-Priced Leads Reduce Workforce Quality

Lower-priced job leads often attract lower-quality candidates who may not have the necessary skills or experience for the job. This can result in increased turnover rates and additional costs for rehiring and training new employees. Additionally, lower-quality candidates may not be as motivated or committed to the job, resulting in a decrease in overall productivity and efficiency for the company.

Paying a small fraction of the going rate to a vendor for job leads also increases the risk of fraudulent or fake applications. Some vendors may use unethical tactics, such as creating fake profiles or submitting false information to meet their quota of leads. This can waste valuable time and resources for employers who have to sift through these applications and potentially miss out on qualified candidates.

Relying solely on low-cost job leads can limit diversity and inclusion in the hiring process. By only targeting certain demographics or using cheaper sources, employers may miss out on diverse talent pools and perpetuate inequality in their workforce.

In addition to these risks, there is also the potential for damage to the company’s reputation. If job seekers have a negative experience with the hiring process or feel that they were misled by false job advertisements, it can harm the company’s image and make it more difficult to attract top talent in the future.

Adam New, Principal Owner, The Cash Offer Company

Safety Risks with Unvetted Construction Workers

An employer in the construction industry or another skilled-labor area who goes with a lower-cost recruitment company risks the integrity and security of their project data and on-site safety. Lower-cost vendors may not have rigorous controls in place to check applicants’ credentials and background, creating a risk that the company may hire the wrong individuals. 

For example, it could fail to look up information about an applicant’s licenses (if licenses are required) or other experiences that they reported. For a construction site, safety-compliance checks and verification of skills will be central. Hiring unqualified workers could pose a risk of serious safety violations, as well as liability for the contractor if unlicensed people are allowed to perform tasks that require special credentials.

I’ve actually seen this happen when a company in our industry tried to reduce overheads by engaging a bargain recruitment service. They ended up hiring a number of people who did not have the certifications that were a basic requirement of the business. Routine audits picked up the error, and the company faced fines and forced downtime as they scrambled to certify or replace staff. The “savings” turned out to be far more expensive than the recruitment costs (which were now increased by the audit fines)—and the failure of trust with their clients meant that the construction schedules were delayed and opportunities for future contracts were lost.

Tyler Hull, Owner and General Manager, Modern Exterior