What is cost per hire?
Why is it important to track?
How can you measure it?
Why is it important to your team?
The Basics of Cost Per Hire
Cost per hire is the average amount of money you spent on making a hire. Focusing on it helps your team to make sure that they are appropriately allocating financial resources.
Cost per hire is an exceptionally common metric for recruiting teams to track so it’s likely your team is already tracking it. Even if you are already tracking it, now is a good time to ensure that you’re tracking all costs effectively.
Why Is It Important to Track?
In this COVID world, everyone is trying to save dollars wherever they can. In fact, major companies, like Google, have been aiming at cutting their marketing and recruiting budgets by up to 50%.
Tracking shows where dollars are being spent and where they can be optimized. In addition, focusing on this metric helps recruiting teams to see the bottom-line impact that they have on a company’s financial health.
How to Measure
The formula is fairly simple. All you need to do is add all of your external recruiting costs and your internal recruiting costs and then divide the sum by the number of total hires for any given period of time.
External recruiting costs are line items like staffing agencies, job board costs, etc. While internal recruiting costs are line items like technology costs, recruiting staff salaries, interview costs, etc.
Tracking cost per hire allows your recruiting teams to make sure that they’re optimizing their tools and work processes with budget in mind!
Want to talk more about cost per hire and how to implement new and useful metrics in your recruiting strategy? Get in touch!