What's the best way to compare recruiting costs?

1 Define your goals

Before you start comparing recruiting costs, you need to define your goals and expectations for each hiring campaign. What are the key performance indicators (KPIs) that matter to you? For example, you might want to track the number of applicants, the quality of candidates, the time to hire, the retention rate, or the return on investment (ROI) of your hires. Depending on your goals, you might assign different weights or values to different sources and methods of recruiting.

2 Calculate your costs

The next step is to calculate your total and average costs for each recruiting source and method. Recruiting costs include both direct and indirect expenses, such as advertising fees, agency commissions, referral bonuses, recruiter salaries, travel expenses, hiring software, and overhead costs. You can use a simple formula to calculate your average cost per hire (CPH) for each source or method: CPH = total recruiting costs / number of hires. This will give you a baseline to compare the efficiency of your recruiting sources and methods.

3 Analyze your outcomes

The third step is to analyze the outcomes and results of your recruiting sources and methods. Outcomes can be measured by various metrics, such as the number of qualified candidates, the conversion rates, the time to fill, the quality of hire, the retention rate, or the ROI of your hires. You can use different tools and methods to collect and analyze these data, such as surveys, interviews, performance reviews, analytics software, or dashboards. These will help you compare the effectiveness of your recruiting sources and methods.

4 Benchmark your performance

The fourth step is to benchmark your performance against industry standards and best practices. You can use external sources, such as reports, studies, or surveys, to find out the average or optimal values for your metrics and goals. For example, you might want to know how your CPH, time to hire, or retention rate compare to those of your competitors or peers. You can also use internal sources, such as historical data or feedback, to identify trends, patterns, or areas for improvement in your recruiting process.

5 Adjust your strategy

The final step is to adjust your strategy based on your findings and insights. You might want to allocate more resources to the sources and methods that yield the best results, or experiment with new or alternative ways of recruiting. You might also want to set new or more realistic goals, or refine your metrics and tools. The key is to keep monitoring and evaluating your recruiting costs and outcomes, and make data-driven decisions that align with your business objectives and needs.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?