S. Amir Kohan

Recruitment Cost and Yield Ratios

Recruitment Cost and Yield Ratios Ratios are the numerical representation of
comparisons. They are normally stated as a percentage. The Recruiting Cost Ratio (RCR) is
one of those measurements. It looks at the cost per hire based on compensation rather
than headcount.

Recruiting Cost Ratio = ((External Costs = $100,000) + (Internal Costs = $100,000)) × 100
(Total First Year Compensation of Hires in Time Period)

The RCR tells you how much you spent recruiting for every dollar of first-year
compensation paid to the new hires.

Recruiting Cost Ratio = ((External Costs = $100,000) + (Internal Costs = $100,000)) × 100
(Total First Year Compensation = $2,000,000)
RCR = 10 percent

Obviously, the lower the percentage, the better (more efficient) the result.
Another measure of recruiting efficiency and effectiveness is the recruitment yield
ratio. It can be calculated at each step of the recruiting and hiring process to determine
how successful you are at each stage of the process.
• How many people were minimally qualified compared to total responses?
• How many people were sent to the hiring manager compared to minimally
qualified?
• How many people were interviewed compared to those sent to the hiring manager?
• How many people were hired compared to those interviewed?
At each state, you can compare a ratio or percentage. The greater the percentage,
the better.


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