What Is Cost Per Hire?
Cost per hire is the total amount of money spent by an employer on finding a new hire. When calculating cost per hire it's important to take into account both external and internal costs to get a true value.
How to Calculate Cost Per Hire?
The average UK employer spends about x pounds and x amount of days when recruiting for a new employee.
Each company has a different recruitment process however the considerations are broadly the same. Here are the external and internal costs to be considered when calculating cost per hire.
- Advertising channels such as job boards and social media.
- Recruitment Agencies
- Job Fairs
- Contractors (e.g. to build a career page)
- Drug testing
- Background checks on candidates such as DBS checks.
- Recruitment software such as an Applicant Tracking System
- The salaries of the recruitment team.
- Company infantry such as computers and phones.
- Cost of referral schemes
- How long the process drags on for could make a lot of difference between a ready and willing hire and a large hole in your finances.
- The employee churn aka How frequently you have to replace employees.
- The quality of the candidate in question. You may not want to stop the hunt until you find a candidate that practically embodies your profile.