Cost per Hire
The cost per hire can be used as a dimension when assessing recruitment processes. Recruitment costs originate internally and externally. Internal costs can be incurred throughout the recruitment process. This includes the amount of time taken during interviews for all staff involved as well as any employee referral awards that are made. The cost of infrastructure required should also be included which may include rental of office space and equipment. External costs will typically be simpler to calculate as they will be billed by the providers, these are likely to include items such as advertising fees and any recruitment events. Recruiter fees could be considered as either internal or external costs and this will be decided by how the organisation views this role.
The formula used in the calculation is:
Cost per Hire = (Internal Costs + External Cost) / Number of Hires