Cost per hire comparison for the three (3) most common methods of recruitment.

1.Contingency Agency

  • fee paid when a hire is made, usually 25% or 30%.
 2.Retained search  
  • 1/3 of the fee is paid when retained; 1/3 1 month later the final 1/3  is paid if a recruitment is actually made.  Therefore, 2/3 of the fee is paid whether or not a hire is made.

 3.On-site recruiter
  • Join your company as part of YOUR team as the recruitment specialist 

  • Consult directly with hiring managers regarding job descriptions 

  • Help determine the best marketing strategy based on your company profile, position requirements, and time frame for filling the open positions

For this example, we assume each recruit's annual salary is $100,000, and the agency commission rates are  25% & 30%.
Candidate's Salary Requirement Your total cost at 25% Your total cost at 30% Your total cost with BAR Your cost per hire at 25% and 30% Your cost per hire with a BAR on-site recruiter averaging 3 hires/mth
3 hires x $100K/yr = $300K in salaries x 25% =

 $75,000

x 30% = $ 90,000   $25K-$30K  
4 hires x $100K/yr = $400K in salaries x 25% = $100,000 x 30% = $120,000   $25K-$30K  
5 hires x $100K/yr = $500K in salaries x 25% = $125,000 x 30% = $150,000   $25K-$30K  
6 hires x $100K/yr = $600K in salaries x 25% = $150,000 x 30% = $180,000 <$40,000 $25K-$30K $6,000

 

Note:  In this example, we have not considered hiring a full-time staff person to fill 6 positions as a viable option, because to do so will mean a lay-off in a short amount of time with all of the negative implications.  Also, we have not considered bringing in a 1099 contractor as a suitable option due to the IRS rules regarding the definition of a contractor.

Contact BAR for a no-cost / no-obligation evaluation of your recruitment needs

 

Bay Area Recruiters, Inc.

Northern California / Bay Area

Phone:  650.465.9322

E-mail us:  info@BARecruiters.com

2010 Bay Area Recruiters, Inc.  All rights reserved.