The cost per hire statistic is a recruiting metric that calculates the costs of employing new personnel. These expenditures include things like sourcing and recruitment advertising, onboarding, and employee referral incentive program charges, among others.
For example, if you recruit 50 individuals for the year and spend an expected $100,000 on the hiring process, your cost per hire will be $2,000 per person. It’s an excellent approach to see if your hiring process is optimal for your sector and job roles.
Cost-per-Hire = (internal recruiting cost + external recruiting cost)/ total number of hires in a given time frame.
Tracking cost-per-hire is important as it helps you to determine recruitment and HR budget, manage costs, and measure the performance of recruiters. Calculating your cost per hire allows you to better manage your recruitment budget and process. To acquire an accurate picture of your organization’s costs per hire, keep track of both internal and external spending. When determining cost per hire, a one-size-fits-all method does not work since numerous variables must be considered, including the role being recruited for, the demand for the talent, and the size of the business.
Also, See: Hiring Workflow
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