Cost of Hiring Explained

What is the Cost of Hire (CoH) and how do you derive it? How do you determine the dollar amount spent on hiring each one of your employees and measure it over a period of time?

Lets break this down into fundamental sections and outline the direct and derived costs.

• Direct costs examples are recruitment team salary, job portal costs, recruitment agency costs.
• Derived cost examples are seat cost for the recruitment team, interviewing cost (internal interviewers), salary incremental cost (for replacement hiring).

Most organizations use the Direct cost to determine their per hire CoH and the usual duration of calculation is quarterly. Lets take an example of a startup with a 3 member recruitment team, using a job portal and doing 8 hires a month.

Lets derive the Direct cost here, assuming average recruiter salary at 60k/month and a job portal conservative monthly cost at 20k, it comes to 2 lakhs a month in Direct costs.

• Doing 8 hires a month, the CoH becomes 25k, ie each new hire costs 25k to hire in direct cost. The industry average is usually double of this at 50k a month.

And these costs keep increasing every year, be it recruiter salaries, job portal costs or recruitment firm expenses.

So how do you bring this cost down? The simple answer is automation!

Increase recruiter productivity, enabling them to do more hires in the same cost, reduce recruitment firm dependencies.

Here is how Rekrutbot does it for you and helps you reduce your CoH by more than 60% in the first 3 months of implementation.

Step 1: Collates and consolidates all your own resumes into a central database and gives you the ability to search through those resumes. The candidates you have added to the database also get their own login to the platform to update their information. This reduces your spend on job portals by more than half and increases the quality of hires, since you are re-using previously screened resumes. So job portal cost goes down and recruiter productivity goes up- Win Win!

Step 2: Automated screening and profiling of candidates from your resume pool.

Our conversational bot- Clara, automatically searches the database you created in Step1 to search matching profiles. It then goes onto hold a telephonic conversation with these candidates and do an interest check, capture profiling information and also ask pre-defined screening questions.

All of this information is autonomously evaluated and candidates ranked. These shortlisted candidates are then presented to the recruiter for them to take it forward.

The conversational bot reduces a recruiters work load by more than 80% and process 10,000 candidates simultaneously, far more than any team of recruiters can do manually.

This results in a direct reduction of more than 80% of CoH, while helping companies get better unbiased profiling information on candidates. Lets peg this down as a major win!

Go ahead and book a demo on www.rekrutbot.ai to speed up your hiring AND reduce your hiring costs, is there anything better than that?