This post was provided by Claudia Allen, editor at the National Association of Colleges and Employers (NACE). NACE connects campus recruiting and career services professionals, and provides best practices, trends, research, professional development, and conferences.
Cost-per-hire is difficult to pinpoint because companies use different formulas to calculate their costs.
However, while it is difficult to compare cost-per-hire among organizations, it can be used internally to help determine where you are getting the best value for your recruiting dollar. It can be used to determine which activities or which schools are yielding the largest number hires for the least cost. Plus, it may help you explain the need for additional resources.
To calculate your organization’s cost-per-hire, use the worksheet below developed by the NACE.
Figuring Cost-Per-Hire
Cost for college relations/recruitment office
(This category includes the total cost of office overhead; salaries and benefits of recruiters—prorated if their time is divided among other HR functions; expenses associated with recruiter training and professional development, e.g., membership fees, conference/workshop fees.)
$ _____
Cost of prerecruiting activities
(Total cost of activities such as resume books, information sessions, related activities, programs for faculty/career services staff.)
$ _____
Cost for recruiting trips
(Expenses associated with on-campus recruitment, e.g. recruiter travel and accommodations expenses, cost of equipment rentals.)
$ _____
Cost for company visits
(Expenses for bringing candidates to the organization, including candidates’ travel, lodging, and meal expenses, and the time of line managers, recruiters, and other staff involved in the visit.
$ _____
Hiring and relocation cost
(Expenses for new hires visiting work city to locate housing, temporary lodging costs, moving expenses.)
$ _____
Cost of advertising
(Expenses associated with recruitment advertising and recruitment literature.)
$ _____
Total cost
$ _____
Total number of college hires
_____
Average cost-per-hire
(Divide the total cost by the total number of college hires.)
$_____
NACE’s formula for calculating cost-per-hire in based on the work of Robert Greenberg, former director of career services at the University of Tennessee-Knoxville.
