Cost Per Hire: How Do You Stack Up?
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Companies are directing more of their time and recruiting budgets toward social media, but are those investments paying off?  Only 1 percent of open positions were filled by candidates sourced through social media, according to a study of U.S. companies with 100 or more employees conducted during June and July by Oakland, CA-based research firm Bersin & Associates.

Job boards and internal candidates each accounted for 19 percent of new hires, followed by referrals at 16 percent, and company Web sites at 13 percent with professional networking sites producing 10 percent of successful candidates.

The average cost per hire for all U.S. companies was $3,479, while large companies, defined as having 10,000 or more employees, averaged just $1,949. The research firm places total annual expenditures for U.S. talent acquisition at $124 billion, up 10 percent over 2010.

Not surprisingly, agencies are the most expensive option, although companies spent less last year.  Respondents said they spend more than a third of their recruiting budgets on agencies to fill just 8 percent of their positions with fees averaging 21 percent of first year salary.

The survey also found that recruiters are overloaded with resumes, yet at the same time, companies are struggling to find quality candidates. Firms receive an average of 144 applications for every entry level/hourly opening and an average of 89 applications for each professional position.

Finally, nearly half of U.S. firms are spending more on contract recruiters in 2011 compared with 2010. The recession prompted most companies to reduce their full-time recruiting staffs. However, as the pace of hiring picked up earlier this year, companies brought in contractors to fill the void.

About lesliestevenshuffman

Leslie Stevens-Huffman is a business and careers writer based in Southern California. She has more than 20 years’ experience in the staffing industry and has been writing articles, blog posts and moderating the Dice Discussion Board since 2006. In addition to her writing pursuits, Leslie is a part-time instructor for UC Irvine Extension and a member of the Human Capital Institute’s Contract Talent Advisory Board. Leslie has a bachelor’s degree in English and Journalism from the University of Southern California.


  1. BY Marca Clark says:

    What costs are included in “cost per hire?”

  2. BY Leslie Stevens-Huffman says:

    Hi Marca,

    Advertising, travel, agency fees, background checks, pre-hire assessments, referral bonuses, relocation expenses and the time expended by internal recruiters and admin staff are generally included in the cost of hire. But companies should also consider onboarding costs and the line manager’s time, to get a realistic view of the cost of each new hire.


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