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What metrics define cost-effective recruiting?

HR News |  24/01/2017
What metrics define cost-effective recruiting?How do you know if your hiring strategies are as cost-effective as they could be? There are a number of metrics to consider when you are working out if you should implement changes in your recruitment process.

Cost per hire

The biggest metric to think about is your cost per hire. This takes into account what your company has spent on recruiting someone new to the business. Some may think they are simple to calculate but there are relevant aspects here that you may not have considered.

For example, have you taken into account the time spent by the hiring manager to interview numerous candidates? Depending on the number of interviews scheduled and how long they last, this could be a significant figure.

It is here where an experienced recruitment agency could have an impact. By only selecting the most qualified and experienced candidates to send on to your firm, the right agency could cut down the number of interviews you’ll have to attend.

An agency can also provide pre-interview screening, which allows your firm to test the candidates by giving them tests or assignments to complete before they attend their first interview.

This allows you to focus on whether you think the candidates will fit into your company culture and do well in the role.


You may find that you’ve hired someone who seems to match the requirement perfectly but they end up either not fitting in or unable to perform the role. If they lasted just a matter of weeks or months in the role, then the retention metric is a particularly important one.

If you’re finding that your hires are only remaining in their positions for a short time, a problem may have arisen with your recruitment process. It’s possible that the wrong people may have been put forward for interviews with your firm.

This emphasises the importance of screening methods to ensure that only the most appropriate people are getting to the interview stage.

When you find that you’re not retaining staff, you have to continue replacing them, which will eat into your budget and cause disruption to the teams in which someone new is continually being appointed to.

Most recruitment agencies will offer a warranty on their services to avoid you having to pay twice for a hiring error or accident. The stronger the rebate, the more due diligence is likely to occur throughout the process. The Ashdown Group offer a three-month 100 per cent rebate.

Quality per hire

This metric may not seem as straightforwardly measurable as the others but it is broken down into aspects that are simple to calculate. Hiring managers should be capable of working out the productivity of an employee, as well as establishing their levels of growth and if they have been promoted. Workers who remain at the same level for an elongated period of time may not represent the quality your firm wants to be hiring.

The impact a new hire makes should be felt by those working closely with them, which should make it relatively simple for HR managers to establish who has been performing well. If productivity levels within a team have risen since a new employee was hired, they likely had a positive impact.

However, the reverse is also true. If your new employee is not contributing significantly to production levels, then there is likely a problem with the quality per hire. You may decide that you have to start recruiting for a replacement, which will then increase the amount you are spending.

Your company’s rate of retention should also be taken into account when establishing the quality per hire. If a new employee leaves within a short amount of time, this negatively affects the quality per hire. This leads to increased expenditure on recruitment, which then eliminates any cost-effectiveness. This is something that can be avoided by maintaining a high quality per hire metric.

By Jon Aspinell

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