As a part of cleared recruiting, it is really important to understand the factors that influence the cost of hiring a candidate at your company. Hiring a new employee involves several costs, both direct and indirect. Accurately calculating these expenses is crucial for budgeting and strategic planning. Here’s a breakdown of the key components to consider when calculating the cost to hire a candidate.
Direct Costs
These are the key items to include under direct costs.
1. Recruitment and Advertising
- Job Postings: Fees for posting job advertisements on various platforms such as job boards, social media, and company websites.
- Recruitment Agency Fees: Costs associated with hiring headhunters or recruitment agencies to find candidates.
- Career Fairs and Events: Expenses related to attending or hosting job fairs and recruitment events, including booth fees and promotional materials.
2. Interview Process
- Travel and Accommodation: Costs for bringing candidates in for interviews, which may include airfare, hotel stays, and transportation.
- Interview Materials: Printing resumes, evaluation forms, or other necessary documentation.
- Employee Time: Salaries of employees involved in the interview process, including HR staff and departmental interviewers.
Indirect Costs
Here’s what you should include in your indirect costs.
1. Onboarding and Training
- Orientation Programs: Costs of materials and resources for new employee orientation sessions.
- Training Sessions: Expenses related to training programs, including trainers’ fees and materials.
- Mentoring Programs: Time and resources allocated to mentoring new hires.
2. Administrative Costs
- Background Checks: Fees for conducting background checks, drug screenings, and other pre-employment verifications.
- HR Processing: Administrative time spent processing applications, conducting interviews, and finalizing hiring paperwork.
Opportunity Costs
And don’t forget to calculate opportunity costs too.
1. Productivity Loss
- Vacancy Impact: The loss of productivity while the position remains unfilled.
- Training Period: Reduced productivity as new hires ramp up to full performance levels.
To calculate the total cost to hire a candidate, sum the direct, indirect, and opportunity costs. This comprehensive approach provides a more accurate picture of the overall investment involved in the hiring process.
By understanding and managing these costs, organizations can make more informed hiring decisions and optimize their recruitment strategies.
Download our recruiting white papers and resources like the Cleared Recruiting Guide here.
THEÂ CLEARED RECRUITING CHRONICLES: YOUR WEEKLY DoD RECRUITING TIPS TO OUT COMPETE THE NEXT NATIONAL SECURITY STAFFER.
