Talent Acquisition (Cost Per Hire)

Talent Management Performance Excellence -
Talent Acquisition Metrics
A Hybrid Approach Leveraging Employer-of-Choice
and Provider-of-Choice Best Practices Focusing on Cost-per-Hire
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Richard Swartzbaugh
End-to-End
Talent Management

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Executive Summary
Like any activity, metrics help measure success in talent acquisition. In this presentation, we will present and explore some of
the more commonly recognized metrics for talent acquisition, and associated benchmarks (e.g., recruitment, selection, and quality of
hire) with a focus on cost-per-hire.
Recruitment
• Cost-per-hire
• Executive cost-per-hire
• Recruitment-expenses-to-HR expenses ratio
• Requisitions per recruiter (or HR FTE)
• Requisitions per recruiter (organizations with dedicated recruiters)
• Requisitions per recruiter (organizations without dedicated recruiters)
Selection
• Acceptance rate
• Positions externally filled
• Positions internally filled
• Time to fill
• Open to approval
• Approval to job posting
• Job posting to start screening
• Screen applicants
• Conduct interviews
• Make final decision
• Offer to acceptance
Quality of Hire
• Separation 0-3 months

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Cost Per Hire Analysis

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Discussion – Recruitment Benchmark Data
SHRM Customized Talent Acquisition Benchmarking Report © 2017 Society for Human Resources Management

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© 2019 Harver.com
What is Cost Per Hire?
• Cost per hire is the economic value placed on the total financial investments an organization makes to attract and recruit new
employees.
• It should be noted that cost per hire should not be used to determine the success or failure of an organization’s recruiting
abilities. Instead, it should be used as a benchmark for the organization’s ongoing recruitment activities. More on this later.
Why Measuring Cost Per Hire is Important?
• Recent research from Bersin by Deloitte indicates that those companies with the most mature talent acquisition programs
actually spend more on the average hire, than those companies who are still trying to figure out the recruitment process for
themselves.
• Although this metric is time-consuming to calculate, it is a worthwhile task as, put simply, measuring cost per hire will give
you an overview of:
 Where you’re spending your budget inefficiently.
 Where the most recruitment money is spent.
 Where you can optimize your expenses.
 By measuring and comparing cost per hire over time, you can also establish the efficiency of new tools and techniques
implemented.
How to Measure Cost Per Hire
Discussion – Recruitment Metrics

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© 2019 Harver.com
Internal recruiting costs include, but are not limited to:
• In-house talent acquisition team salaries
• Talent acquisition system costs – hardware and recruiting software
• Salary costs of time spent by hiring managers
• Interview costs (# of hours multiplied by hourly salary of interviewer or hiring manager)
• Learning, benefits and & career development costs for your recruiting team
• Other fixed costs such as employee referral bonuses, government compliance, etc.
It is worth noting that internal costs can include resource allocation from one team to another for recruitment purposes, even if the
money to pay for it stays within the company
External recruiting costs include, but are not limited to:
• Third-party fees, such as agencies
• Advertising costs including job boards and social media
• Job fair and campus recruiting costs
• Employer branding activities
• Travel expenses for recruitment
• Technology costs (e.g., recruiting software)
• Aptitude test providers
• Assessment centers
• Drug testing
• Background checks
• Applicant Tracking System (ATS) fees
• Fixed costs such as physical infrastructure (e.g., office rental)
• Signing bonuses

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© 2019 Harver.com
Average Industry Benchmarks
• The average cost-per-hire was $4,129 in 2017, down from $4,425 in 2016 but equal to what it was in 2015
• 15% of all HR related expenses are due to recruitment costs
• 90% of 1,749 companies used employee referrals to source candidates
• 85% used their company website to source candidates
• 2% used TV advertising to source candidates
• 61% of 1,641 companies used networking to source executive candidates
• 41% used recruiting websites to source executive candidates
• 78% of 1,668 companies don’t use automated pre-screening software to sift resumes

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Discussion – Selection Benchmark Data

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Discussion – Selection Benchmark Data

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Discussion – Quality of Hire Benchmark Data

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Discussion
Discussion – Terms, Definitions, Calculations

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Discussion

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Discussion

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Discussion

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Talent Acquisition (Cost Per Hire)

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