Hidden cost of recruitment tops £5,000 per new hire

The average hidden cost associated with recruiting a new employee is more than £5,000, according to a study by recruitment consultants Angela Mortimer.

The figure comes from the firm’s Cost of Recruitment Calculator, which was developed to allow employers to monitor the cost-per-hire of new staff, with the aim of helping them meet recruitment needs on time and within budget.

The software takes into consideration both hard costs (such as advertising rates and recruitment consultancy fees) and soft costs (such as including management time) to quantify the total cost of recruitment.

Consultants from Angela Mortimer applied the calculator to Cass Business School, part of London’s City University. It found the organisation was spending more than £175,000 a year on recruitment.

It’s HR director, Richard Farmer, said: “It was useful to establish how much we actually spend on recruitment. This helped us to identify areas where we could improve our efficiency and streamline our recruitment processes to reduce the time to fill a vacancy.”

Research published last week by Cranfield School of Management, in association with Personnel Today, found the majority of employers do not measure the cost of recruitment.

The study revealed that employers were throwing money at recruitment without measuring the return on their investment. Less than half of the 557 organisations surveyed evaluated the success of their recruitment processes.

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