CPH, or Cost-Per-Hire, is one of the best stats to know when evaluating any hiring software. Whether you’re looking at a job board or an onboarding system, this metric is the go-to for determining price-to-value. It’s particularly valuable due to the often-complex pricing structures for the SaaS industry. Are you paying per user, per view, per contact, or any other format? You’ll find price shopping is difficult, because everything charges differently. Using CPH (and CPC, or Cost-Per-Contact), you’ll have a standard scale for comparing your options.

Now on to the formula — let’s start with labeling our variables:

Pricing (P) — This one will vary from site to site. Some charge a monthly fee company-wide, or a per-user model may be in play. Either way, we’ll want to break down the pricing to how much you’ll be paying per month for a single account. More on that later.

Contacts per Hire (N) — In your organization, what is the typical number of potential hires you have to interact with before your position gets filled? Make sure to get an idea from multiple recruiters in your company, if applicable, to make sure you have a realistic average. You may be a superstar that fills in ten contacts, but Jeff may be needing 40 per position for his area.

Hires per Month (H) — In a typical month, how many positions do you hire for? You’ll want to make sure this stat is company-wide and averaged for at least a year. In your slow quarter, you may hire 10, but then in a peak season, maybe that shoots closer to 100.

Contact Limit © — For the job board you are evaluating, how many contacts are you allowed to make? Defining this can seem tricky — some boards limit resume views, some limit your contacts per month, or even per day. In any case, make sure to get the number per month. If the limit is 50 per day, the contact limit we’ll use is 1500. (Just make sure to keep in mind the daily limit in your evaluation, too — if Jeff uses all 50, you may be out of luck to get a position filled that day!)

Do these look familiar? If you use CPC (which we highly recommend), you’ll notice CPH is nearly identical. You can easily convert between the two, but we’ll get to that later. We’ll even use the same data here as we did for calculating CPC so we can see the relationship between the two better.

If our retail staffing company is hiring 70 people in a typical month, and averaging 30 contacts per hire, our variables can all be defined as follows:

N = 30

H = 70

Based on these numbers, we can easily evaluate Acme Placement and Marco Polo Jobs with our formula, especially if our CPC is already calculated. (In fact, if you have your CPC already, just take the total monthly cost you found in step 4 and divide that by your typical monthly hires. Easy!)

If you don’t have your CPC yet, no fear — just follow along below.

Using the CPH, we can see that Acme will cost your company $57.50 per hire, while Marco Polo Jobs will run you $1.41 on average. Over the course of a year, Marco Polo Jobs would save this company over $47,000.

Now that you have your CPH, if you need your CPC, just backtrack to step 5, and divide the monthly cost by the product of your number of monthly hires and your average contacts per hire. It’s that easy! For example, to find Acme’s CPC, step 4 would show this:

Now that you’re familiar with CPH and CPC, you can get an idea of just how much any hiring software is costing your company. (And an idea of how much money you could save with Marco Polo Jobs!) I’m excited to hear how this has helped you, or any other thoughts you have! You can reach me at luke.willey@marcopolojobs.com.

If you find your CPH and CPC are eating your budget, we’d love to hear from you. Check out our solution at https://www.marcopolojobs.com/!



SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here