How Much Does It Cost to Find and Hire?

How much does it cost to find and hire can be determined by the cost of posting jobs, labor involved in the process and that is it. What is missing is the loss in productivity, the amount of revenue employers expect the hiring manager to produce doing what they were hired to do. If Sales Managers, who are hired to produce revenue is doing non-sales activities, then the revenue is lost and is now cost.

Example: Bob is Regional Sales Manager in LA. His Salary is $80,000 per year including benefits. Based on 2,080 working hours a year he is paid $38.46 per hour. Bob is expected to produce double his pay in revenue ($38.46 X 2 = $76.92 or $159,993 per year). The real cost per hour is $115.383 to the employers or $239,996 per year. ($1.923 cost per minute)
  • - To calculate the cost of turnover for an employee, fill in the grey fields with the applicable information.
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    • Initial Variables
    A Yearly Salary for Position Salary/Year Salary Per Hour  
    B Yearly Salary of Hiring Party Salary/Year Salary Per Hour  
    Sourcing Candidates
    1 Post Jobs Online # Postings Dollars Per Posting
    2 Local Newspapers/Media # Postings Dollars Per Posting
    3 Agency Fees % of Annual Salary  
    4 Other Dollars    
     
    Applicant Tracking
    5 Purchased Software Dollars    
    6 Cost per Résumé # Résumés Dollars Per Résumé
     
    Résumé Screening
    7 Reading / Reviewing Résumés in "A" Stack # Résumés Minutes Per Résumé
    8 Unsolicited Calls about the job or from recruiters # Calls @ Minutes Per Call
     
    Telephone Screening
    9 First Call to verify information and interview # Calls @ Minutes Per Call
    10 Reference Check on the best candidates # Checks @ Minutes Per Check
    11 Second Call to schedule for live interview Calls @ Minutes Per Call
     
    Interviewing / Testing
    12 First Interview onsite/field # Meetings Minutes Per interview
    13 Second Interview # Meetings Minutes Per interview
    14 Background Check, Testing and Skill Assessments # Checks $ Per Candidate
    15 Cost of interview site, travel to location and other costs $    
     
    Offer / Hire
    16 Final Interview $    
     
    Training / Orientation
    17 In-House Orientation Hours    
    18 In-House Training Hours    
    19 Coaching $    
    20 Office Setup $    
    21 Business Cards $    
    22 Other $    
     
    TOTAL SEARCH-TO-HIRE COST
     
    Turnover Costs  
    23 Learning Curve weeks @ % Productivity
    24 Loss of Revenue $    
    25 Overtime to Cover Vacant Position $    
    26 Temp Costs to Cover Vacant Position $    
    27 Severance Package $    
    28 Benefits (COBRA) $    
     
    What does it cost you if the person leaves and it results in a hostile separation?
    29 Vandalism or Violence $    
    30 Disruption of Staff $    
    31 Legal Fees $    
    32 Legal Settlement $    
     
    TOTAL TURNOVER COSTS
    Total Costs
     
    33 Total Search-to-Hire Cost        
    34 Total Turnover Cost        
     
    TOTAL HIRING & TURNOVER COSTS