Understanding your Cost-per-Hire

Not fully understanding your cost per hire can be a hidden killer within organizations looking to scale. Various factors such as industry, location, position-level and recruitment strategies all play is significant role in determining the cost of each needed position.  

The average cost per hire in the United States $4,700.

Ways to Reduce your Cost per Hire:

1. Optimize your recruitment process: Streamline and automate various stages of the hiring process, such as resume screening, candidate assessment, and interview scheduling. This can help save time and reduce costs associated with manual labor.
2. Leverage employee referrals: Encourage your existing employees to refer qualified candidates for open positions. Employee referrals tend to have a higher success rate and can significantly reduce recruiting costs.
3. Develop a strong employer brand: Build a positive reputation as an employer to attract a larger pool of qualified candidates. An attractive employer brand can help reduce the need for expensive advertising and recruitment agencies.
4. Utilize social media and online job boards: Leverage social media platforms and online job boards to advertise open positions. These channels are often cost-effective and have a wide reach, allowing you to connect with potential candidates without significant expenses.
5. Conduct targeted job advertising: Instead of relying on generic job postings, tailor your advertisements to specific candidate demographics and niche platforms. This approach can increase the chances of attracting qualified candidates and reduce the cost of reaching a broader, less relevant audience.
6. Develop a talent pipeline: Proactively build relationships with potential candidates, even when you don't have immediate openings. By creating a talent pipeline, you can tap into pre-screened candidates when positions become available, reducing the need for extensive sourcing efforts.
7. Implement an applicant tracking system (ATS): Use an ATS to automate and manage your hiring process. This system can help you track candidate information, streamline communication, and optimize the overall recruitment workflow, saving time and reducing costs.
8. Evaluate your recruitment sources: Regularly assess the effectiveness of your recruitment sources and channels. Identify which sources yield the most qualified candidates and focus your efforts on those channels, reducing spending on less productive sources.
9. Conduct effective interviews: Train interviewers to ask targeted questions and assess candidates effectively. This can help you make informed hiring decisions and reduce the chances of costly wrong hires or multiple interview rounds.
10. Negotiate with vendors: If you work with recruitment agencies or other external vendors, negotiate pricing structures and fees to ensure you get the best value for your money.