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10 Important Factors to Consider When Calculating the Cost of Recruiting for Your Company

Updated: Jan 23

Businesswoman working on calculations
Calculating the cost of recruiting

10 Important Factors When Calculating the Cost of Recruiting for Your Company


Recruiting new employees is essential for any company to grow and succeed. However, it's important to understand the costs involved in recruiting to make informed decisions. Here are some of the most important factors to consider when calculating the cost of recruiting for your company.


Recruitment Agency Fees

If you use a recruitment agency, they will charge a fee for their services. This fee is usually a percentage (typically 20-30%) of the new employee's salary. While this can save you time, it's a significant cost to consider, especially when making multiple hires.


Internal Recruitment Team Salaries

The salaries of your HR and recruitment team members should be included in the recruiting cost. Their time spent on screening resumes, conducting interviews, and other recruitment activities is a direct expense.


Job Advertising Costs

Advertising a job opening can be expensive. This includes posting on job boards, social media, and other platforms. Depending on the visibility and reach you want, these costs can add up quickly.


Technology and Tools

Investing in recruitment software, applicant tracking systems (ATS), and other tools can streamline the hiring process. However, these technologies come with a cost, which should be factored into your overall recruitment budget.


Training and Onboarding

Once you've hired a candidate, there are costs associated with training and onboarding them. This includes time spent by trainers, materials, and sometimes even onboarding software. Proper onboarding is crucial for new hires to become productive members of your team.


Branding

Building and maintaining a strong employer brand to attract top talent requires investment. This includes creating promotional materials, attending job fairs, and improving your company's online presence. A strong, consistent brand can reduce long-term recruitment costs by attracting candidates more easily.


Lost Productivity

While the position is vacant, your company may suffer from lost productivity. Current employees may have to take on additional responsibilities, which can affect their performance and the overall productivity of the team. This indirect cost is important to consider as it impacts your company's efficiency.


Employee Referral Programs

If your company has an employee referral program, offering bonuses or incentives for successful referrals can be a cost. However, this can also be a cost-effective way to find good candidates, as your employees likely know people who would fit well within your company.


Background Checks and Screening

Conducting background checks, drug tests, and other screenings are necessary to ensure you hire the right candidate. These checks cost money, and the total can increase with the number of applicants.


Interview Expenses

Interviewing candidates can incur various costs, such as travel expenses for out-of-town candidates or providing refreshments during in-person interviews. If you have multiple rounds of interviews, these costs can multiply.


Recruiting is an investment in your company's future, and being mindful of these costs ensures you get the best return on that investment. Take advantage of the insights our Recruiting Calculator can provide: https://www.arenarecruiting.com/#roi-calculator



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