When it’s time to review budgets and determine what you need to do to attract the best candidates for upcoming positions, you’ll need to calculate a cost per hire (CPH). This is the estimated cost of all the work that goes into finding a candidate and getting them started. It includes things like recruiting, sourcing, interviewing, orientation and other activities related to bringing the new hire on board. The actual cost can vary significantly from company to company depending on how many hiring managers are involved and what the screening and hiring process looks like.
Here are some key things to factor in when calculating your cost per hire:
External Costs
Are you accounting for all of your external costs? Make sure to include external costs such as advertising fees, travel expenses for recruiters and candidates, and career fair costs. You will also need to account for the cost of background checks and other candidate assessments.
Internal Costs
Internal costs include recruiting hours, employee referral payouts and screening time that involves management outside of the recruiting department. Any costs your company incurs related to hiring an individual will need to be labeled or categorized as internal costs. Make sure you are accounting for all of the costs that are all linked to the new hire.
Consolidate With Other HR Metrics
In addition to the expenses and costs associated with the new hire, you need to consider factors such as retention rates, the quality of the candidate you are bringing in, and how long it takes to fill the position. Remember that an open position can be a ‘cost’ to a company, especially if it is affecting productivity and the bottom line. You may not have a tangible number to work with to factor in these other costs related to filling the position, but it’s important to remember there are additional costs associated with the changes. This is why you can’t compare your CPH with other companies — there are several metrics and costs to consider when reviewing your actual cost.
Partner With a Top Chicago Recruiting Firm
If you need help attracting high-quality human resources candidates to lower your cost per hire, consider working with an award-winning HR staffing agency in Chicago. Contact Arlington Resources today to learn how we can help with all of your human resources recruiting efforts while keeping costs down.
