For most companies, everything still comes down to the bottom line, which is why “Cost of Hire” remains one of the most important metrics to track in HR’s recruiting efforts. So many times, we hear that the cost of hiring someone is more expensive than a full year’s salary for that position, and often this is certainly the case. That is why it is crucial to know exactly how much it is costing your organization to hire each position, and where you may be losing money. HR needs to be able to show executives cost-effectiveness when it comes to a recruiting strategy. Cost of hire takes into account a few different sub-metrics, which of course will vary based on the position being hired for.
The most common ones are the following:
• Advertising costs
• Job board subscription costs
• Relocation assistance
• Referral bonus
• Travel expenses
• Agency fees
• Recruiter labor
• Additional staffing expenses
After the cost per hire has been determined with the above metrics in mind, HR will be able to show how much money they are saving the company by reducing the time to fill, or perhaps convince executives to increase the recruiting budget because of the cost of lost productivity.
