Sometimes it is valuable to compare your business or your plans to recruitment benchmarks. HR Magazine published some stats from the Society of Human Resource Management 2016 Human Capital Benchmarking Report that are excellent measures of what employers, candidates and recruiters might experience in the workplace. Items like costs to hire, tenure and span of control were addressed in the report.
The average cost to hire was listed as $4,129 in this 2016 report. This cost includes the sum of independent agency fees, advertising agency fees, job fairs, online job board fees, employee referrals, travel cost of applicants and staff, relocation costs, recruiter pay and benefits, and talent acquisition system costs, divided by the number of hires. Considering all the items on this list, the benchmark figure is actually quite low. It is obvious based on this figure that the majority of hires are happening without the assistance of independent recruiters and that in-house recruiters are producing good return for the investment.
The average days to fill a position is listed as 42 days. This is the time from when the job requisition was opened until the offer was accepted by the candidate. It is counted in calendar days, including weekends and holidays. Many recruitment assignments would take in excess of 42 days as independent recruiters are being asked to work the more difficult and challenging openings. So 42 days is just an average.
Employee tenure is averaging 8 years for those companies reporting, and involuntary turnover is listed as 8% per year. The actual turnover rate including all factors voluntary and involuntary is 19% on average. That is a significant number of people moving through organizations annually. That says that over a 5-year period, for a company with 100 employed at the start of the five years only 25 of the original 100 would remain at the end of year 5. The cost of lost talent, the investments in training and development are a significant part of operating costs that can at some point disappear from the organization. Cultural fit is worth time spent on the front of a hire to avoid losses down the line.
Salaries to overall operating expense averages 44%. When you add the HR-expense average of 15% to that mix, it is clear that people are more than half of the typical organization’s operating expenses.
Do you have another good source for recruitment benchmarks that you can share? Please add it to the comments below!