Calculating The Average Cost per Hire

Hiring new employees is costly, and most companies and recruiting agencies know that by now. It’s much less expensive to hire from within or promote current employees than it is to hire someone new. The main costs are associated with the cost of recruitment services, skills training, slow adoption of corporate culture and norms, costs associated with adding employees to programs, in-house HR costs, background and reference checks, referral bonuses, uniforms, and credit checks. Indirect costs include things like recruiter travel expenses, time at employment fairs and other hiring events, and advertising.

Cost Per Hire

Cost Per Hire

Depending on the position, length of the hiring process, and the job sector, among other factors, a new hire can cost between $240 and $10,000. And that doesn’t include executive new hire which can be much more expensive. With all these factors and such a range of numbers, talking about the average can be a bit misleading. It’s better to look at the averages for specific industries or positions in order to gain an understanding of what is normal within your field.

Typically, we can point to numbers around $4500-$5000 as a reasonable average cost per hire. But depending on the source you may find numbers closer to $8000-$10000. Do these numbers mean anything to your company?

Calculate Your Own Cost per Hire

A more valuable number these days is the cost per hire that you can calculate from within your company. While you can calculate how much it costs in expenses, a more valuable number is the cost to your company for having a vacancy within the company.

The first number you’ll need is annual sales. This can be from your division or entire company, depending on size and variety. You’ll also need to know an average number of days it takes to hire a new employee. If the recruiting department has specific costs, you can add these in.

Start by finding daily revenue per employee by dividing the annual sales by 250. Multiply your result by the number of days your company takes to hire someone new. If you have additional costs, add those to your result. The result is the cost to your company of hiring someone new.

As you can imagine, the length of time to hire someone new is in fact a key factor. By reducing the length of time it takes to hire someone new, you can ensure you’re bringing in the maximum revenue possible within your company.

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The Highs and Lows of Staffing Agencies

The ideal for any staffing agency is to have a consistent flow of incoming potential candidates, regular clients who are regularly hiring, and placements that happen on a fairly regular basis. Unfortunately, reaching this point of balance within a staffing agency takes a lot of time. The reality on the ground is that you’ll have high points and low points, times when a number of great matches happen and times when it seems like nobody wants to actually hire the great candidates you’re putting in front of them. Accept that this is part of the work now and you’ll be able to prepare for these ups and downs.

Staffing Agencies Highs and Lows

Staffing Agencies Highs and Lows

What Goes Up Must Come Dow

Maybe more importantly, when things seem to be at a low low, you can depend on them to go back up again. Keep this in mind when placements don’t fall into place. When a candidate you’ve been working with suddenly decides not to take a job they seemed perfect for, or when your clients reject your candidate, it can feel like you’ve wasted incredible amounts of time for nothing. Forget about that time and keep moving forward. Learn what you can, but don’t dwell on it. The only thing you can effect is the future, so work on that instead of dwelling on the past.

Balancing the Financial Side 

When everything is just cruising along, let’s say you’ve had a month where you’ve made a number of very high caliber placements, remember to set aside cash for the weak months. It’s so easy to feel like you cannot be beat when you are running at full speed and making all the leaps you take. But if you go overboard when things are good, the bad times will be even harder.

Preparing Staff for Their Highs and Lows 

If you have staff at your hiring agency, you know that they’re going to be experiencing the highs of great placements as well as the lows of failure. Don’t put pressure on them to feel bad about poor performance. Let them know that this happens, and sometimes it feels like it will never end. But it always does.

Recruiters have to work incredibly hard to keep themselves afloat. There have to be a few balls in the air at all times for things to work out. Sometimes all the balls fall to the floor and it can feel devastating. Pick them back up and start juggling again – it’s the only way to get better and reap rewards from this rewarding career.

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The Benefits of Hiring Interns

There are plenty of reasons why hiring an intern can be a great idea. It’s essential to know exactly why you’re hiring them and what your goals—and theirs—are for the experience.

Intern Motivation
Interns, often young and still studying or fresh out of college, tend to be highly motivated and interested. They will come into an internship with the intention of both learning from a company, and using their experience there to further their own career path, either through simply gaining real life experience, or earning a letter of recommendation that’s not from a professor. Interns have an openness that a regular hire may not have because they also are aware of the opportunity to make professional connections for their future. All interns also know that companies will sometimes hire their best interns, and this makes them extremely hard workers.

Tech Savvy
This alone is good reason to hire an intern—Gen Y professionals simply have an ease with technology that is always helpful in the office. Not only can you trust them to learn programs easily, but they might be able to show other employees a few things that they didn’t know about company software or iPads or Apps nobody knew about. Interns can also have fresh ideas about how the company could be utilizing social media more effectively.

Potential Hire
Since hiring new employees is taking longer and becoming a more arduous process for most companies, any shortcut means savings of time and money in the HR department. An internship functions as a natural trial period for a job in the company. Employers have a chance to witness the employee’s work ethic, know how, and skills on the job without committing to anything. If they’re excellent, the company may choose to bring them on as a paid employee and bypass the trouble and expense of a new employee search.

Unattached Can Mean Creative
The intern has the advantage of a new perspective on the way things are running in a company. They are not as attached to the power structures, or the way things have always been done. If given the liberty to do so, and enough respect that they feel that they do have a voice during the internship period, they just might have some very clever solutions to things a company had been blind to through habit.

Better Retention Rate
Employees who were hired on from an internship often stay with the company longer. This may be in part because of a kind of loyalty an intern gives to the company that sees their potential and is willing to take a risk on it. It may be a factor of the recent economy—it’s simply harder to go out there in the job market again once you’ve gotten used to being fully employed.

All things considered, it simply makes sense for companies to implement an internship program. It saves money, forms a bridge to the greater community, is relatively easy and inexpensive to set up, and has great potential benefits for everyone involved.

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Why Companies Are Taking Longer to Hire New Employees

It is a truism of our current hiring climate that employers are taking longer to hire new employees. The average amount of time it took for U.S. companies to say “you’re hired,” from beginning to end of the process was 25 working days on average. The same study showed that bigger companies, defined as those with over 5000 employees, took much longer—58.1 working days on average.

More Jobs
At the same time, this trend of longer hiring periods coincides with the highest number of American job openings in the past seven years—4.7 million according to a June, 2014 U.S. Bureau of Labor Statistics count. There are still plenty of people looking for work, so we can assume that the lag time isn’t because of a lack of qualified applicants. And so the numbers don’t entirely match up. The picture is a bit perplexing—how confident are employers?

Picky Employers
One partial explanation is that employers have become pickier, raising the requirements or credentials for jobs. These new, higher bars, don’t bode well for many in the job market, like recent college grads who simply don’t have five plus years experience in any field. Yet, some employers are overall happier with the results, once they do get a new hire on the job. By taking more time with the process, they feel they are taking a more active role in curating the social and work culture of their company. Overall satisfaction with those who make it through the more elaborate screening processes seems to be up as well.

A More Elaborate Interview Process
It is a reality these days that job searchers will likely have to go through the gauntlet to get their desired job. Many employers have added multiple interviews for top choices. Future employees may be asked to go through more screening, even drug testing, for jobs which previously didn’t require such tests. Also, the increase in social and business networks online has added to HR’s load in multiple ways. First, when screening an applicant, their online history is usually investigated, and this can be time consuming. Second, many companies are using professional networks like LinkedIn to court and recruit desirable and sometimes over-qualified applicants. This may be happening simultaneously to screening other solicited applications.

Determining Costs
If a company is unsure whether sales and revenue warrant the expense of a new employee, we may see them dragging their feet and prolonging the entire hiring process while they determine whether they can afford to fill the position. Delaying or extending the hiring process may sometimes simply be the direct effect of human resource departments having also suffered cuts during the recession.

Ultimately, however, slower hiring times usually means a loss of revenue for a company. The logic is simple: if they need to hire, it’s because business is good, and they have more clients than they can take on. Prolonging the hiring process can also negatively effect profit.

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How to Keep Employees Engaged

All companies depend on their employees to do their jobs. But great companies can depend on their employees to do their jobs well, with creativity and enthusiasm – in other words, employees that are engaged are highly productive and successful, promoting the success of the company itself. So how can you ensure that your employees stay engaged in the long term?

1. Importance
When employees feel that they have an important role or that the work they’re doing is important, they stay engaged. Let them know that their role is important without overselling it. Reward them in meaningful ways for meaningful work. Get to know employees. Find out what their goals are, what they feel should be important about their job, and then make sure they are encouraged to follow their passion.

2. Tools and Expectations
On one side of every job are the expectations that the employee, the boss, and the company have for a position. On the other side are the tools that allow the employee to live up to those expectations. Make sure that each employee understands what they’re expected to do and that they have the necessary tools to be successful.

3. Train Employees in Conflict Resolution and Problem Solving
Another key to ensuring employees are engaged is ensuring that everyone works well together as a team. Being able to solve problems and resolve conflicts in a constructive way will help everyone to work together well. It will also help your employees to better interface with clients, customers, suppliers, or service providers.

4. Be Consistent
Rather than getting everyone excited about a big plan to improve engagement, take small steps to ensure that each employee is consistently getting the feedback they need. Constructive criticism can be just as powerful as rewards, as both demonstrate the importance of the work being done.

5. High Expectations, Lots of Flexibility
Start with high expectations and let go of things you think you don’t like about employees. People are likely to live up to expectations, whether high or low, so foster the performance you would like to see from everyone. But remember not to be overly judgmental or harsh if they don’t get their immediately. Giving everyone the room to learn and grow towards lofty goals will ensure that they have something to work hard towards. Give them a helping hand up and they’ll return the favor with dedication and engagement.

6. Manage Company Culture
Listen to the conversations that employees have with one another. Listen to their stories about what’s going on at the company. The culture of a company can foster engagement, enthusiasm, and pride. But it can also foster distrust, disillusionment, and evasion of responsibility. When employees talk about positive experiences and laugh together, they are participating in a supportive and engaging work culture.

7. Ask for Feedback
Make sure that you’re getting the advice you need to do your job as well as possible. Check in with employees to see if they feel confident about your leadership or role. Be available and open to requests for help or constructive changes.

Increases in efficiency, productivity, and job satisfaction have been linked back to the way that employees are engaged. And it makes sense logically that a happy, satisfied employee will work harder and do better work. If employees like the company they work for and they feel the company appreciates their work, they’ll stick around and get better at what they do. Facilitating this kind of long term relationship and growth is what anyone in leadership should be thinking about when making policy decisions about fostering engagement among employees.

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10 Most Important Things to Remember When Updating Your Resume

Resumes are notoriously painful to write or update. Often the previous version isn’t even accessible or it sounds trite and hollow, if you can find an old file at all. These tips are designed to be helpful for people who have an old resume they’d like to work from, but they’re also applicable for people who are starting to write their resume from scratch. 

1. Objective Statement? Nope.  

Forget the objective – if you have career goals, that’s great. But it’s also your responsibility to make them a reality. Talk about your goals during the interview. Instead of an objective, give the reader a quick, straightforward summary of what they’ll find in the resume. Most people are going to read hundreds of resumes, so summarizing succinctly will be doing them a favor. 

2. Accomplishments, Not Responsibilities 

For each job, don’t list what you were supposed to do, list what you actually did. Make sure to update results and achievements based on what the job you’re applying for will entail. e.g., if the job description says you’ll need to improve productivity, mention how you improved productivity at your last job and briefly state how you did it. 

3. Abbreviations are Okay 

As long as they make sense, you can use abbreviations. In the past, this was a no-no, but brevity is valued more highly today than ever before. (Twitter?) 

4. Keep Hobbies and Activities Relevant 

Play guitar in a band? That’s nice, but unless your job will require you to play the guitar, don’t mention it. Again, anyone reading your resume is looking for applicable skills, experience, and accomplishments. And they’re probably hurrying through many applications. 

5. Formality is Less… Formal 

While it’s still important to be respectful, don’t assume that you have to be stuffy in your cover letter and on your resume. Personality is also interesting, depending on the company you’re applying to. Learn a bit about company culture before applying, some companies don’t like things to be too formal. 

6. They Know You’ll Send References if They Ask 

Don’t end with ‘References available upon request’. No reason to state the obvious. 

7. Know Your Audience 

Once again, do your research. Even before you sit down to update your resume, sit down and research the company and re-read the job announcement. Find out everything you can about the position and update your resume with that information fresh in your mind. That way you’ll only include relevant things. 

8. Use a Professional Email Address 

That doesn’t mean you should use your work email address if you’re currently employed. But you shouldn’t have your, either. Try to create an email address that uses just your name. If isn’t available, try or

9. Leave Out High School (If You Went to College) 

Put the highest level of education you completed first and end with your Bachelor’s degree, unless you’ve only completed high school. 

10. Proofread, Proofread, Ask a Friend to Proofread 

There is nothing worse than sending a resume with a typo. You’ve poured over this document time and again, fixing every word so that it’s succinct but meaningful. Don’t leave ‘there’ where you meant ‘the’. Proofread once first thing after breakfast and read it all out loud. Make sure there aren’t any mistakes. 

These days, very few people read through the whole resume, unless it catches their eye. Simple, to the point, and concise resume summaries are appreciated and give the reader a reason to read on. Consider how the reader must feel reading hundreds of these things and try to make it at least quick and easy to get through. And finally, because everyone can see through a puffed up resume, be honest.

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The Pros and Cons of an Employee Referral Program

We’re often told that the best job market is the hidden job market of personal referrals. There’s always someone who knows someone who is applying for the same job as you, so they’ll probably get preferential treatment. Candidates are often wary of using agencies and sending out resumes all over the place, because they assume that they’re not close enough to the hiring department to be considered. But networking has been shown to provide additional benefits to employers and staffing agencies. Employees that are hired through existing relationships are more likely to be loyal to the company and to stay in the job. 

As a result employee referral programs have gained popularity. Some are well structured and offer benefits or bonuses to employees who bring in talent. Others are as simple as asking employees to consider if they have friends who might be good for an open job. There’s a nice balance to be reached for a structured employee referral program, but it’s important to understand the risks involved. 

Nepotism and Preferential Treatment 

Other employees may be threatened by an employee referral program. Current employees who are hoping to be moved up into a better position may feel that a new employee who was hired as a result of another employee’s referral maybe offered the position and they are being unfairly overlooked. And there’s a better chance that protected groups will be underrepresented if employee referrals are relied on too much. 

Cliques and Idea Stagnation 

In addition, when people who know one another outside the workplace find themselves working together, their likely to form groups or alliances that can make other employees feel like they’re on the outside. The ‘ganging-up’ of groups within the company can lead to a poor kind of decision making. Individuals who think differently from the rest of the group will not be given as much weight when they offer new ideas. And new ideas and fresh thinking will not be as common within the company. 


Companies that are over-reliant on an employee referral program can also find that their employees feel they’re being offered something that’s unattainable. Great benefits or bonuses that never materialize will cause employees to be discontent due to the poor structure of the employee referral program. 

Pros Still Outweigh Cons 

Even though these are serious considerations, there are still many benefits of an employee referral program, as long as it’s realistic and well thought out. Passive candidates who don’t cost the company a lot in fees are a boon, and they’re more likely to stick it out and feel welcomed onto the team. Plus if you’re giving bonuses to current employees for their referrals, employee morale will improve with successful hires.

The balance of finding great candidates through current employees is possible to strike, especially when you’re aware of the potential risks involved. As long as your employee referral program is clear and benefits both the company and the individual employees, you can find ways to hire the right people.

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Risks and Rewards of Owning a Staffing Company

Staffing agencies provide necessary services to companies that want to hire the best talent but don’t want to maintain their own hiring department. There are plenty of reasons why staffing companies continue to be an important resource for businesses, but running your own staffing company comes with its own challenges. Besides the challenges of running a business, there are certain risks that are specific to providing staffing services. The good news is that if you’re aware of those risks you can prepare for them, allowing you to reap the many rewards of being in this lucrative and exciting field.


Ready-to-Work Professionals

Being relied upon means always being ready to provide clients with great hiring options. But that also means you’ve got to have skilled professionals in the wings. There’s a bit of a chicken-and-egg challenge at all times, because when you have great candidates, you are working to get them placed quickly. How many talented candidates can you manage and how many companies can you safely provide for?

Competitive Rates

Keeping up with the competition and offering both your clients and employees the kind of agreement that works will be a big challenge. You have to watch your bottom line to ensure your business is making a profit. But you also have to make sure the percentages you earn from the work of your employees and the fee from clients are competitive enough to keep them from going elsewhere.

Employee Screening

When you’re in the business of finding great employees, you’ve got to be able to trust that you’re placing good people. When placements don’t work out, it can be extremely harmful to your business. Using any kind of Database to help you like a Staffing Software may have its challenges but it is a must in order to screen the employees in advance and be ready when time comes.

Licenses, Insurance, Practices

To top it off, there are the usual concerns. You’ll need to be licensed to operate a staffing agency, with proper registration and insurance. Employee liability insurance is also very important and watching for workplace hazards is critical. Plus, you’re in the business of employment, so you need to provide proper training for your employees.


Always in Demand

If you can build a clientele, you’ll always be in demand. Creating great relationships with your clients will result in their returning every time they’re looking for someone new.


Working for yourself in a staffing company gives you the flexibility to earn a lot of money if you work hard enough.

Building Relationships

You have the opportunity to work with people to build their companies and careers. For people who enjoy building and maintaining relationships, staffing is a great business to be in.

Staffing is a great business to be in because it’s always changing, you work with new people all the time, and the rewards for hard work are great. The more you put into a staffing company, the more you’ll get out. But like all small business owners, you’ll find that the first few years will test you and your determination to get things working right. The time and energy needed to build a staffing company will result in great rewards.

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4 Steps to Improved Recruiting Productivity

High productivity is a critical goal for recruiters. The more placements made, the better the revenue levels – it’s a simple equation. But productivity can be stifled by a number of factors which recruiters tend to believe they have no control over. The truth is that you can take steps to get control, and improve productivity by being purposeful and aware of the typical stumbling blocks of recruitment professionals. Here are four steps to take if you’re hoping to improve recruiting productivity as an individual recruiter or as a manager at a recruitment company. 

1. The Subtle Art of Prioritization

 First and foremost, learn to prioritize. This deserves a whole blog post of it’s own, but it is critical to productivity. Deadlines pile up, emails pile up, inboxes overflow – always figure out the one task that needs to be done first and finish it, then move on to the next critical task. There’s nothing like a list of to-dos to make you feel overwhelmed. But if you write it all down, then rank everything in the order of which should be done first, you’ll start checking things off and feel great about it in no time. 

2. Workflow Refined 

Does the way you interact with potential clients and candidates have a flow? There are always a set of tasks which need to be done for each client or candidate. They happen in a particular order. Make sure you’ve got a workflow that works well for each situation. When a new candidate pops up on your radar, how do you approach them, what materials do they need, how do you decide which positions to tell them about? Once they’re interested, how do you make an interview happen? Once you’ve got a workflow, a set of steps that has to be completed for each recruitment, you can easily go through those steps rapidly and know you’re not forgetting anything important. 

3. Pay Attention to Timing 

People are always looking for jobs, right? And companies are always hiring! Actually, there are shifts that happen somewhat predictably, and it pays to be prepared. Nobody hires in December, they wait until January. Don’t wait until January – instead, make sure you’re prepared for the January rush and you can be ahead of the pack. 

4. Use Technology as Intended 

If you don’t already have an applicant tracking system or some kind of database, you’re working in the dark ages. Yes, it maybe a bit pricey to implement new software, but one of the rewards is improved productivity. The right system can help improve workflow and prioritization, too. Just make sure you understand what the system is designed to do and use it the way it’s designed to be used. 

Sometimes, productivity can be improved with a few little adjustments. Maybe you haven’t stopped to breathe and re-asses the way you work in a while. Take the time to do so, you’ll be glad you did and the results will pay off in the long run.

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Evolving Role of Human Resources in the Digital Age

In every role played by human resources professionals, there is an element of communication. It’s critical that job openings are described accurately and each interview has to be conducted in a way that the key information is communicated and extracted from the interviewee. Even HR responsibilities like workplace manuals and coaching involve a lot of communication, whether that means in-person meetings, written manuals, or regularly checking in with a new hire.

As technology has changed, communication has changed, too. And being able to use the most comfortable communication tools of the up-and-coming workforce is critical to being an effective HR professional.

Learning the Ropes

Whether you’ve been in HR for decades or just starting your new HR role, it’s critical that you understand how important electronic communication is to today’s employee. Most employees will now expect the vast majority of communication to come via email. They may even expect to hear from you via social media or text messages rather than phone calls. As Generation X becomes more prominent in the workplace, so will online employee evaluation instead of paper versions. There are a wide range of digital tools such as Recruiting Software out there that human resources professionals can use in order to manage all such communications efficiently.

Instead of seeing the digital transitions as challenges, realize that there are good reasons for the shift from paper to digital. Electronic communication is just more efficient than paper communication. Online evaluations can demonstrate the data to you quickly and the way you need it in ways that paper evaluations cannot compare to specially if you are evaluating large volume of applicants. Learning how to use HR technological solutions will help you to improve efficiency as well as improve communications between the HR office and the rest of the staff.

Hiring in the Digital Age

And then there’s the hiring side of an HR department. Hiring an employee using paper forms may take days sometimes weeks even.  While having employment forms on paper can be comforting, you once again sacrifice efficiency if you require that a paper copy be sent to your office. In today’s digital age an online From Management tool such as Onboarding System can offer HR ‘best practice’ in employee form management, they will enhance legibility of information, making it less susceptible to misinterpretation and reduce the time to process new hires.

Digital communication will allow you to review many more candidates in a shorter amount of time, plus you’ll be able to compare them quickly and efficiently. This is the initial evaluation and you’re making it relevant by making it digital. During the next round, consider adding video to the process. Some HR companies are even promoting job opportunities with a video description and then asking for video interviews.

Being Available to Employees

Another role of the HR staff is to be a confidant or point of contact for employees. Complaints about workplace problems will come to you. If you make sure that you are communicating with employees in the ways that make them comfortable, you’ll be opening the right door to them. But remember that not everything is better in digital format. Sometimes it takes a friendly smile and an in person conversation to find out how things are really going.

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