Recruiting Insights – Cost Per Hire and Employer Size


Recruiting data varies based upon a wide variety of factors. If you are a recruiter who has worked for both large employers and smaller employers then you have experienced this difference of employer size first hand.

Recruiting Costs

Smaller organizations with fewer than 1,000 employees report cost-per hire of about $3,000. Larger organizations (1,000+ employees) had a cost-per hire of over $4,200 or 40% more. The way to leverage this higher cost is to require your recruitment advertising agency to aggressively negotiate lower media rates on your behalf. Recruitment media have gotten very competitive so asking for better rates based upon volume may save you some recruiting dollars.

Annual Recruiting Volume

Recruiting volume is significantly higher at larger employers who hire an average of 500+ employees annually. Recruiters at smaller employers hire just 48 employees per year. The increase in cost-per-hire for large employers is a result of additional financial investments to maintain high-volume recruitment activities to provide a steady stream of new high quality workers. To address such your CFO’s concerns about recruiting expenses, it is wise to closely study methods for retaining the highest performing employees who are also the most expensive to replace.

Diversity Recruiting

Large organizations are likely aware of being a target for legal actions resulting from unfair hiring practices. As a result, big employers spend more money on diversity job fairs and diversity advertising to attract a diverse workforce and discourage lawsuits. Recruiters at large organizations typically invest more to create employer brand awareness to attract candidates. Employer brand awareness and strong positive employer reputation have been found to increase the number of workers who apply and more importantly accept job offers extended by recruiters.

Recruiting Cycle / Time to Fill Openings

Another hiring metric, time-to-fill, can be analyzed based upon organizational size. Time-to-fill is the number of days that it takes to fill an open position. Large employers usually take average of 40+ days to fill an opening, compared with less than 30 days for small organizations. Because large employers hire more employees, they tend to have more structure in the interview process. This is done in order to manage the larger volume of applicants and to demonstrate consistent and legally defensible hiring practices. This expanded recruiting and interview process may show up in the form of additional interviews used to make a well informed hiring decision. Multiple signatures may be required for job offer approvals. Additional selection testing and background checks are also elements that add to the time to fill at larger employers. Large employers may lose applicants due to lack of engagement during a longer process. It is important to explain the details of the process and to set realistic expectations up front with all applicants. Sending a well timed post card or e-mail during recruitment can maintain candidate interest during longer recruiting processes.

Knowing your recruiting situation is one thing. Being honest with yourself about it and taking appropriate reaction as a result is what sets you apart as a master of your craft. Recruit the best. Always.

For more information on this topic or to get a free report on your recruiting situation,
Please contact Steve at steve@ADS4HR.com or call 602.434.2379