Definition: Cost-Per-Hire is a key performance indicator that calculates the total expenses incurred during the recruitment process for a single vacancy.
It encapsulates all costs, from sourcing and interviewing candidates to onboarding, reflecting the financial commitment needed to acquire a new employee.
Expenses related to job postings, promotional materials, and advertisements.
Costs incurred when external recruitment agencies are involved.
Incentives or bonuses offered to existing employees for successful referrals.
Costs associated with bringing candidates in for interviews or assessments.
Expenses related to applicant tracking systems, job boards, and other technological tools.
Costs linked to the orientation and integration of new hires into the organization.
Understanding cost-per-hire aids in budgeting and financial planning for recruitment activities.
Monitoring CPH helps identify areas for process optimization and cost reduction.
Comparing CPH over time or with industry standards provides insights into the efficiency of recruitment strategies.
Informed decisions regarding the allocation of resources for recruiting initiatives are facilitated by a clear understanding of CPH.
CPH calculations should be aligned with specific time frames to accurately represent recruitment efficiency.
All direct and indirect costs associated with recruitment must be considered for a comprehensive evaluation.
Regularly reviewing CPH ensures adaptability to changes in the recruitment landscape.