Cost, time and quality are common factors and criteria in deriving the certain metrics to measure efficiency of hire programs. How important are they then?
There are metrics involved in measuring the efficiency of hire programs. HR departments of companies may use different measures in hire programs to assess the worth of HR activities and to determine the classification of expenditures of certain activities. Quality, as well as time and cost per hire, can be used to measure efficiency of hire programs.
The hire programs of companies may incur cost and expenses, which may be seen as inevitable. However, expenses and costs must not be too much that they can become overbearing and wasteful if the needed result is not accomplished nor realized. Moreover, company owners and people in the HR department must be decisive and resourceful so the objectives of hire programs can be achieved. Though costs and expenses may be inevitable, they must not be sacrificed nor should they be higher than the required budget to meet HR deliverables. That is where the efficiency measurement comes in hire programs.
Cost per hire is a common measure in assessing the efficiency and effectiveness of hire programs. Cost per hire is regarded by many in the HR field to be simple. To derive the amount of the measure, certain costs can be taken into account. These may include advertising fees, agency fees, employee referrals, travel expenses, internal recruiter costs, and other costs associated with the hiring of a certain position. Because of different positions, the HR department may have different costs per hire for every position. Nevertheless, the average cost per hire can be calculated to assess the measure in hiring costs of the HR department.
Cost per hire is indeed seen as a valuable tool. However, since it does not take into account the quality of the hire and time length taken in filling the position, it can’t be considered the only basis in measuring the efficiency of hiring programs.
Some companies in the recruitment field use an improvised cost of hire measure of hiring efficiency. Known as efficiency per hire, this measure takes into account the total compensation of hire individuals aside from the total cost to hire with the number of candidates hired. The efficiency per hire is derived by dividing the total cost to hire by the total compensation of candidates being hired.
Time per hire is another measure in hiring program efficiency. Ironically, time is one of the important factors in hiring activity that is not included to derive the cost per hire. Hence, it is important that the time of hiring activity for a certain position must be taken into account to assess the efficiency of the HR department in filling up the position required to be in the production, to increase or meet revenue estimates, and to attain the company goals. With these in perspective, measuring time in hiring activity is indeed an important criterion in determining the efficiency of the HR department and its people.
Quality is another factor in measuring the efficiency of hire programs. It is one of the essential criteria; however, it is neither easy to calculate nor to estimate. Companies may use different measures and equation to assess the quality factor of the HR department and its hire programs.
Companies may use other metrics to measure efficiency of hire programs. They may include send-outs and hire by recruiters and candidate quality by sourcing channels. HR departments can use different metrics as well. What important are for the common elements to include cost, time, quality, and person or persons involved in the hiring process.