How can you analyze the cost of recruiting methods?
The only way you can tell which of your recruiting methods is bringing you the best candidates is to keep records and analyze what gives you the best return for your money. Many job applications ask candidates how they heard about the job or what attracted them to the company. This information enables organizations to compute costs and determine the best
practices for the company to use in the future.
To calculate the cost of a classified ad, record how many people answered the ad, how many of those that applied were interviewed (or received follow-up action of some type), and how many were hired. Divide the cost of the ad by the number at each step. Compare this figure to other methods you've used and you'll see where your money was spent most efficiently.
Price per employee hired, however, is not the only consideration. It's quality you're after. A local newspaper ad for production supervisors may bring you a large number of applicants. You may hire several of them. But a more extensive, more expensive search may have yielded you a better, more experienced crop of applicants from which to choose. The more specialized the job and the more key a position is in the organizational structure, the broader and more costly the search usually needs to be to ensure you of the very best candidates.
Over time add to your analysis performance measurement and retention data to further analyze what is the most efficient method of recruiting.
CHECKLIST: Calculating recruitment and selection costs
Calculating the cost of each hire is a difficult analysis because there are tangible and intangible costs to calculate.
Tangible costs include:
all advertising
all employment agency fees
costs of publications, including Internet sites, used
cost of all examinations and tests during the selection process, including equipment
security, credit and reference checking costs
human resources overhead allocation of expenses (office space, staff salaries, supplies, computer charges, etc.)
telephone calls
unique recruiting costs such as telegrams and reimbursement of interviewing expenses
data processing and related Internet costs
relocation costs
costs associated with maintaining memberships in professional organizations used for networking
training and communication costs (internal and external)
all special payments such as employee referrals and signing bonuses
Intangible costs can include:
disruption of regular business functions
morale impacts
employee concerns and complaints
reduced management and processing efficiency
lower productivity
costs of turnover
over-hiring to maintain production
Depending upon the industry, there may be additional costs such as safety costs from a higher number of accidents; additional overtime to compensate for the vacancy; and the maintenance of a higher-than-normal human resources or recruiting staff to handle replacement needs.
Still, for purposes of analyzing recruiting costs, start simply. There are a number of extremely sophisticated approaches you can use, but remember that there is inevitably a subjective component in evaluating success. One beginning approach is to use a simple spreadsheet that shows for each recruiting method:
How many applicants
How many were hired
How well they did (this being the necessary subjective evaluation)
How long they lasted
Even this minimal analysis will reveal a great deal about the effectiveness of your recruiting strategies.
<p>The only way you can tell which of your recruiting methods is bringing you the best candidates is to keep records and analyze what gives you the best return for</p>
How can you analyze the cost of recruiting methods?
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