• Recruitment Cost

    Recruitment cost refers to all the costs involved in hiring a new employee. It involves the cost of giving advertisement, screening Resume, Conducting interviews etc.

    • Getting an employee on board, job posting through channels to the training part that is involved in the recruitment process.
    • The advertising cost to agency fees, salary of the HR team involved in the recruitment process, travel, relocation charges by number of hires would incur in the recruitment cost factor.
    • There are many channels that can be used for hiring direct applications, employee referrals, and subscription to jobsites, HR consultants and newspaper advertisements.
    • Training can also be included as a part of recruitment cost.

    Recruitment costs are becoming increasingly high during recent times as there is a dire need for them to look for something cheap without compromising on the quality of recruits.

    Basic distinguishable stages of recruitment activities are:

    • Sourcing
    • Screening
    • Selection
    • Fitment
    • On-boarding

    Main parameters related to recruitment cost during different stages are


    Conversion Ratio (Volume of Resumes) (Vendor Specific)

    = No. of resumes shortlisted/ No. of resumes sourced by vendor

    Conversion Time (in days) (Vendor Specific)

                                  = Date of Shortlist – Date of Request


    Volume Processed Ratio (per day)   (Recruiter Specific)

                                    = No. of resumes processed/ No. of resumes sourced by vendor

    Processing Time (in days) (Recruiter Specific)

                                    = Date of Shortlist – Date of Sourcing entry


    Selection involves a fair deal of relationship management. Hence, most metrics revolve around feedback capturing mechanisms to identify experiential nodes at various selection touch-points.

    4. FITMENT

    Fitment Closure Time (Vendor Specific)

                                    = Date of Offer – Date of Selection

    Conversion Ratio (%) (Vendor Specific)

                                    = No. of offers accepted / No. of offers made


    On-boarding encompasses efforts to acquire, accommodate, assimilate and accelerate new team members, whether they come from outside or inside the organization. This includes induction training conducted to give a brief overview of the company policies, work methods and long term visions and objectives.

    How to reduce recruitment cost

    • Hiring through the referral system which is one of the best ways to reduce the hiring cost –Used by most of the big companies
    • Associating with educational institutions to source employees
    • Creating a better brand image which can attract resumes directly to the company
    • Participating in career fairs
    • Possessing a better mining and screening facility, and reducing the hiring cycle time
    • Placing advertisements on jobsites
    • By moving over to the online recruitment process. Recruiting online is ideally more focused, fast paced, effective, and gives higher ROI on administrative expenses.
    • By outsourcing recruitment and training process
    • By hiring laterals which offers more cost benefit rather than hiring fresher and providing them training.
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