One of the hardest things about investing in a new technology is understanding how, exactly, it will impact your company. In short, is this purchase going to be worth it? Is it going to make things easier for you, or will it be costly and difficult to implement? What kind of a return on investment will you get from this purchase?
At ApplicantStack, we completely understand this mindset. After all, there are dozens of products out there promising to save you time, hassle, and money. We’re not interested in empty promises. We’re interested in the facts. We developed this cost-per-hire calculator so you can actually see the projected return on investment for your company.
Like most data systems, the most accurate input yields the most accurate output. So before you start filling out the cost-per-hire calculator, collect some data. Consider the one-time and recurring costs you put in when recruiting new employees. Then, let the Cost-per-Hire Calculator do its magic.
What Does the Cost-Per-Hire Calculator Show Me?
The cost-per-hire calculator computes several figures based on your information. Here’s what you’ll learn.
Current Cost Per Hire (CPH)
Cost per hire is the total amount you spend to find, recruit, and sign each new employee. There are two primary factors involved in this number: internal expenses and external expenses. Internal expenses include organizational costs paid for within your company, like HR salaries. External expenses are paid to outside vendors like job marketing boards or hiring agencies.
How Much You Could Save
This is your projected cost per hire after you implement ApplicantStack. The cost-per-hire calculator examines your overall data to compute exactly how much money your company could save annually. Many of our clients see savings of 10% or more, and these savings compound over time as employees become fluent with the easy-to-use software.
Labor Cost Per Hire
This is the amount you’re spending on employees, recruiters, or other agencies for each new hire. It includes the wages paid for the many hours spent reviewing resumes, scheduling interviews, and corresponding with candidates. An applicant tracking system reduces this number by automating many of these tasks.
Advertising Cost Per Hire
The amount you spend on advertising also contributes to your total CPH. The Society for Human Resource Management’s (SHRM’s) Talent Acquisition Benchmarking Report found that 68% of companies use paid job boards to find new hires. Some use print, radio, and even television advertisements to make their job openings known. These all add to your advertising costs. Many applicant tracking systems cut down on these costs by offering access to paid job boards and social media sites, including LinkedIn and Facebook.
Also called the submission-to-hire ratio, your hiring rate is the percentage of applicants who are offered and accept a position. If you received thousands of applicants and only hired three new people, you’d have a very low hiring rate. A lower hiring rate can indicate that your prescreening methods aren’t effective; too many unqualified people are applying. In contrast, a high hiring rate could mean you’re receiving fewer applications, but they come from more qualified candidates. ApplicantStack helps you find the candidates you want by screening out the less qualified and posting your job where it can be seen by the right people.
Recruiting Time Per Hire
How much time does it actually take for you to hire a new employee? If you’re receiving a lot of applications, it’s going to take your team a long time to go through them. ApplicantStack uses online scheduling, pre-application questionnaires, resume ranking, and automatic email responses to reduce your recruiting time per hire, which ultimately saves you money.
Ready to try it? Our new cost-per-hire calculator uses a unique formula to help you determine your current hiring costs – and how much you could be saving with ApplicantStack. Check it out here.