Calculating Recruitment ROI

Mercer PeoplePro Blog Recruitment ROI

How to Identify Recruitment ROI

Recruitment ROI is probably not the first thing you think about when planning how to attract the best and the brightest to your companies. We are also running a mile a minute and, at times, it feels like we are throwing darts at a variety of recruitment channels but not sure if they are really working. Although everyone has different measurements of success, there are a few basic ideas behind calculating and evaluating recruitment ROI.

Clearly define your expectations and what results you are looking for

  • You should have different expectations for hard-to-fill positions than those that are relatively easier to fill. For example, you may attend specific professional organization meetings geared to hard-to-fill roles. If you get one candidate from that you may decide that it was highly successful. Conversely, the cost of attendance at another meeting geared to less hard-to-fill positions may be considered a failure if you do not identify 3 strong candidates.
  • Keep in mind that events can change over time. One year they are valuable and the next they are not. You may want to attend the event/meeting more than once in order to identify its success. When your “product” is human beings it is hard to predict behavior as specifically as we would all like.
  • Be realistic about expectations. You may be looking for a needle in a haystack and you will not be able to make a hire easily. Make sure you give your Talent Acquisition team the tools they need to find someone. That might include relocation costs, use of a staffing agency or professional sourcing organization.

Retaining employees should also be a factor in calculation of recruitment ROI

  • If you hire staff and they leave
    within a short period of time, on a consistent basis, you are spending more on
    each hire than you might want to.
  • By using a simple average hourly
    rate of the staff recruiting individuals — the hourly cost of manager interviewing
    time, on-boarding costs and any other relevant costs such as marketing
    materials — and dividing that by the number of hires made can give you a sense
    of your return. If you have people
    leaving within 6 months your costs will go up significantly over the year. Getting to the right person may take
    longer but if they are the right person for the job your costs can be amortized
    over years instead of months.

The time to hire factor

The length of time it takes to identify candidates and bring them into the organization is also part of the calculation. Take a look at how long it takes other similar organizations in your geographic area to hire someone. Look at your statistics over the past year or so – if you have them – to help identify how long the process might take.

The identification of ROI and its success will not only help you budget money and resources appropriately, but will help with direction and focus for the Talent Acquisition team. However, don’t let this prohibit you and your team from trying new ways of recruiting. Just like with traditional sales and/or marketing, sometimes the best idea is the unexpected one.

HR Expertise On Demand

If you’re a small or emerging business and would like some expert HR help on recruitment strategies or any HR topic, contact a PeoplePro specialist. Schedule an appointment today at Mercer PeoplePro — we’re standing by and ready to assist.


Written by Mercer PeoplePro Growing Your Business specialist, Ruth Baylis

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