* Is High or Low Best: Lower is Better
Human Resources (HR) Recruiting & Hiring Expense as a Percentage of Total HR Expense measures the amount spent on attracting, screening and onboarding new talent relative to total HR spending over the same time period. Attracting and retaining high quality talent it vital to the success of nearly any business, therefore recruiting and hiring expense typically consumes a relatively large portion (in some cases, 25% or more) of the total HR budget, particularly in industries that rely highly-skilled knowledge workers to gain a competitive advantage (e.g., financial services, high-tech, pharmaceuticals, etc.). There are however many factors that can increase the cost of recruiting and hiring, including high turnover rates, low employee satisfaction, unproductive recruiting staff, cumbersome screening processes, and inefficient use of third-party recruiting channels (e.g., poorly allocated spending on job postings, third-party vendors, etc.).
The total cost related to recruiting and hiring new employees divided by total Human Resources (HR) Department expense over the same period of time, as a percentage. Recruiting and hiring expenses typically include labor (recruiters, hiring managers, etc.), technology, vendor spending and other overhead related to attracting, screening and on-boarding new talent for the organization.
Two values are used to calculate this KPI: (1) the total cost of recruiting and hiring, and (2) total Human Resources (HR) Department expense over the same time period. The total cost of recruiting and hiring typically includes the cost of labor (salaries/wages, benefits and commissions or bonuses), third party vendor fees and technology related to job requisition marketing (i.e., posting jobs on LinkedIn, Monster, etc.), employee screening (i.e., interviews, background checks, etc.), travel expenses for candidates and any related third-party recruiter fees. Total HR expense should include labor, technology, occupancy and other overhead costs related to HR operations, including recruiting, hiring, training and development, employee relations, payroll and human capital management. The actual cost of benefits (e.g., health insurance premiums, investment management fees, etc.) should not be included in the numerator or denominator for this calculation. New employee sign-on bonuses, referral fees and relocation costs should not be included in this calculation.
(Total Recruiting & Hiring Expense / Total Human Resources Expense) * 100
The total cost of recruiting and hiring (labor, job postings, travel costs, etc.) for all open positions (front-line or entry-level staff, managers, directors and executives) divided by the...
KPI Type : Cost
Formula : Total Recruiting Costs / Number of Open Positions Filled
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