Best Practices

Hiring Process

Recruitment Costs

Managing Diversity

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Organizations that are leading in the war for talent always identify methods to reduce recruitment costs while continuously searching for creative ways to recruit top quality candidates in less time.

Organizations are as unique as the people that work in them. This is the challenge in identifying and sharing best practice hiring processes and information related to recruitment costs. The secret to success is not to replicate a hiring process that works wonders for one organization, but to follow a proven methodology that has been successful for many leading organizations.

Our extensive and ongoing best practices research has identified a number of critical success factors for organizations looking to enhance their hiring abilities and reduce their recruitment costs. North Star Human Resources Inc. has developed an easy to follow 5-step methodology based on these critical success factors.

Use our proven 5-step methodology outlined below to identify potential areas of improvement in your company's hiring process:

Step 1-Benchmarking

Define the current hiring process and identify associated recruitment costs. The most commonly used measure of recruitment costs is Cost Per Hire (CPH). Cost per Hire is calculated in one of two ways:

Option 1 - total all direct recruitment costs incurred in hiring one (preferably an average) employee, as well as the proportion of general recruiting expenses, (e.g. advertising, career fairs, etc.) that contribute to attracting candidates.

Option 2 - total all annual recruitment costs and divide that total by the number of positions filled annually.

CPH = Recruiting Costs/Number of Positions

Download our
Cost Per Hire
Calculation Worksheet

An important aspect in benchmarking and tracking recruitment costs is consistency in tracking and comparing the same information over time.

Step 2-Analysis of Benchmarked Data

Once your recruitment process has been identified, the analysis step will provide insight into what hiring procedures are administrative and which areas are value-added/strategic areas. Examine closely what categories and procedures you are investing the most time and money in. The goal is to identify the areas of greatest and least return on your investment.

Step 3-Identify & Explore Options

Once an analysis is complete and further insight is gained, leading organizations brainstorm, explore and prioritize options that will enhance the quality of hires, while minimizing cost of recruitment.

Step 4-Implementation & Return on Investment (ROI)

What determines which initiatives will be implemented and which ones are not? After analyzing each option, leading organizations choose and place their efforts in the one or two initiatives with the greatest impact on success and the highest return on investment.

Download our sample
Return on Investment (ROI)
calculation methodology

Step 5-Follow-up & Monitoring

Following up and measuring results of the one or two high impact initiatives your organization chooses to implement is an important step in determining ongoing best practices and success.

Our research has revealed that organizations winning the war for talent identified the category of technology in the hiring process, specifically corporate website recruitment, job and application tracking and resume management technology, as having the most impact, and the greatest return on investment. This top-ranked initiative has proven to enhance the calibre of job candidates while simultaneously reducing hiring costs. And the results are astounding! Our research shows reduction in recruitment costs are anywhere from 30% - 70% per hire, with the average reduction being 50% when utilizing technology in the hiring process.