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About Recruitment Costs

Every recruitment solution, be it a job referral system, job board, social recruiting platform, CRM, or interviewing technology usually highlights the reduction of recruitment cost as a primary benefit. Recruitment costs for new employees, in particular for specialized professions, are a major consideration for employers, which is why reducing turnover is usually a primary concern of the HR department.

There are many different metrics that can useful for determined an accurate assessment of total cost. For recruitment channels such as job boards or agency recruiters, employers can look to the cost-per hire and then overlay that cost with an evaluation of long term performance and quality of hire. Additional data points that are often used in regards to cost include the total cost per hired employee across an entire company, the total compensation per employee, and the total recruitment spend for every new hire across a particular time frame.
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Recruitment cost is the total amount spent to recruit a person starting from the job posting to joining the employer. In other words, it can also be termed as cost per recruitment or placed candidate. The analysis of recruitment cost is necessary for profit analysis of an organization or a company. Most of the recruiters are not conscious about this matter, and that is why they can not figure out whether their recruitment was effective or not. Successive progress of an organization does not only depend on its production or service benefit but also on its recruitment benefits.

To calculate the total profit amount of a company it is necessary to adjust recruitment costs, and that is why it becomes essential to calculate the total amount spent while recruiting. Recruitment cost per person is necessary to evaluate the effectiveness and individual profit gain for this company. By adopting a few steps it can be calculated.

Those steps are as follows:

- First of all, total amount spent on job advertisement needs to be calculated.
- If the recruitment is made via referrals or recruitment agencies then the amount spent for that purpose must be calculated.
- Amounts spent on logistic supports during recruitment interview or relocation expenses needs to be counted.
- After that interview panels and recruiters costs need to be counted.
- Finally, all those expenses need to be summed up which will give the total amount spent on the recruitment process.

The amount spent per recruitment or recruitment cost per person can be obtained by dividing the total expense with total number of active candidates.