Knowing the cost per applicant of each recruiting source lets you more effectively plan your budget. Uncovering which sources are producing the highest-quality candidates lets you know where to place additional resources. Likewise, finding out which sources are less effective means you can redirect your budget to more profitable recruiting sources.
Defining Cost Per Applicant
The cost per applicant measures how much you spend on recruiting resources. This cost includes job postings, online sourcing tools, recruiter hours spent on a role, onboarding, equipment, salary and other expenses involved in finding and hiring employees. To determine your cost per applicant, add up the recruiting costs incurred, then divide by the number of qualified applicants received. Be aware that your numbers may be high if hiring passive candidates, as they are not actively searching for jobs and typically take more resources to attract and bring aboard.
Why Cost Per Applicant Matters
Knowing which recruitment tools are most effective for finding talent provides a guide for planning your recruiting budget. To start, find out what percentage of applicants were qualified enough to turn into candidates, how many candidates completed at least one interview, and how many interviewees were hired. Using this data, figure out whether the sources bringing you the highest number of applicants are bringing the most quality applicants. Divide the total costs of each channel by the number of applicants delivered. You will get a cost per applicant. Use this data to compare job boards and other networks that may have varying pricing models. If certain job boards or channels do not bring quality candidates, focus your recruiting budget where it is most effective.
How Cost Per Applicant Affects Recruiting Budget
Along with your company website and employee referrals, knowing which job boards, social media sites and other recruiting sources are most effective helps to maximize your budget. Cost per hire is the average amount of money spent on making a hire. This metric can be used to create or track your recruiting budget. For example, if you plan to hire 50 employees in a year, and your cost per hire is $3,000, you can estimate spending $150,000 on recruiting. You can compare the annual cost per hire over many years to uncover significant changes.
Find Top Performers With USA Staffing Services
To have more time to find the best talent, partner with USA Staffing Services. Our team is ready to help with managing your back office!