Recruiting metrics24
If you need information about data collection and segmentation, you can
take a look at the SHRM/ANSI standard guide.
Is cost per hire really an important
metric?
Companies that use this metric consistently have one great advantage in
mind. Tracking internal and external costs helps talent acquisition teams
create budgets and adhere to them. It’s easy to spend where you don’t
need to, if you don’t consistently quantify your recruiting expenses. So in
that sense, it’s vital to have an indication of cost per hire every year.
But, there are disadvantages to this metric. HR thought leader and
author Dr. John Sullivan, who specializes in strategic talent management,
has long opposed use of cost per hire, calling it an “evil” metric. He cites
many reasonable arguments like the fact that it distracts from strategic
recruiting and quality of hire.
Spending with quality in mind, instead of costs, makes sense. The best
people might be expensive or take longer to acquire, but they’re a
guarantee for long-term success. For example, if this year’s cost per hire
has tripled from last year, that doesn’t necessarily mean a bad thing. You
might have hired better (and more highly-paid) recruiters, advertised
in paid (in addition to free) job boards, or invested in a good Applicant
Tracking System (ATS) - all of which can result in better hires, despite
their cost.
Another problem with the cost per hire metric is that you have to take
into account complementary metrics. For example, there’s some value in
knowing that, in 2015, the average cost per hire was $4,000. But, is that
a little or a lot? Should companies try to reduce their spend? To draw an
actionable conclusion, you need to have other information too, like time