What is the sum total of hires

First let us discuss what is cost per hire? How do you calculate it?

It consists of three sub divisions in it

Cost per hire is the sum of total amount spent for hiring to the total hires made in that particular time period

Cost Per Hire = (Sum of all external costs + Sum of internal costs)/ Total no. of hires in the time period

External costs includes all sources of spending outside the organization in the specified time period to meet the recruitment needs which includes advertising and marketing expenses, Back ground check costs, campus hiring expenses, contingency reports, medical check costs, money spent on employee referrals, Job drive/ fair expenses Pre-screening expenses, Relocation fee, Sourcing costs, Travel expenses of the candidates, Technology costs, Third party agency fee, RPO fee

Internal costs include all sources of internal costs and resources used for hiring efforts in that particular period. Cost of recruiting staff, cost of sourcing staff, L&D costs towards recruitment, Non labour office costs

Total hires include all the hires – full time, part time and interns where the effort from organization is induced towards bringing the talent in.

P.S: Do not include salaries of employees hired.

Now here are a few ways you can reduce your costs. Let’s go one by one

Advertising and Marketing expenses: Every organization is allocated with a budget to advertise the jobs/ new initiatives or positions. Instead of advertising the jobs or programs start spending on building a brand that people opt for. Use the following effectively

Analyze your campus hiring strategies. You need not hire every year travelling pan India. Instead use options like

Which will decrease not only your hiring costs but also allows you to reach larger pool and talent.

Prefer virtual hires rather than physical drives. Use mediums like google hangouts and skype effectively.

Promote employee referral schemes which will bring down lot of other costs however also keep a check on referral pays by the following ways

Have a strong and efficient sourcing team. Prefer talented guys in the team rather than entry level graduates which can reduce consultants involvement to close the position. Keep trying new consultants if feasible to reduce dependency. Encourage referrals and use social media effectively to close critical positions rather than consultants. Don’t forget your internal employee champions who can be promoted if possible.

Also start implementing the below

Use methods like closing time effectiveness. Award recruiters who excel in the same. Analyze your needs and reduce the staff if necessary. Audit your recruitment process.

Measure the sourcing effectiveness regularly. Have a check on the team. Reduce the consultant hiring ratio. Reward the performers. Source internally.

Spend here. Train them. Take help of your job board vendors for effective use of platforms say it Naukri/monster/CareerBuilder/ shine. Also remember don’t overspend too. Teach your employees how to use their network.

Promote green environment in office.

Before ending this blog just remember the following lines quoted by Jim Rohn

“If you are unwilling to risk the unusual, you will have to settle for the ordinary “

Krishna Vamsi A. is the Talent Acquisition Partner – University Relations at ING Vysya Bank Limited. You can follow him on Twitter @krishna5115