4 ways to measure return on recruitment investment

Like with any business function, recruitment spend needs justification, and return on investment to be measured and reported on. But how do you measure whether a hire was a good investment with some kind of science and consistency rather than anecdotal feedback or a manager’s endorsement?

We believe there are four key metrics that can be applied and reported on to give some substance to your analysis. They are:


  1. Time to hire.

  2. Quality of hire.

  3. Cost of hire.

  4. Time with the business.




Time to hire

When assessing time to hire, look at the total time taken to hire someone for a role, from the time the ad was posted to the time you receive the signed contract. A longer placement period results in a loss of productivity elsewhere and higher costs (both absolute costs, as well as opportunity costs). It can also be valuable to assess where you spent the majority of your time in the recruitment process. For example, how much time was spent on:



  • Developing the position description.

  • Communicating the opportunity.

  • Screening applications.

  • Interviewing candidates.

  • Shoulder tapping.

  • Internal processes and paperwork.


Monitoring where your time is allocated and if it was effectively used will help extract key learnings and efficiencies. It can also help identify tools that can help speed up certain processes and improve efficiency, like SEEK Talent Search, or panel interviews versus one-to-one interviews.



Quality of hire

Next, look at the quality of the hire you have made. Review how satisfied you were with the selection of candidates to choose from and the quality of the final candidate hired. Evaluate the quality of hire against the sourcing channel. Sense check this with the hiring manager and the outcome of the employee’s performance review discussions. You want to assess quality against both skill-fit and culture-fit within the role. This is by far the hardest metric to measure as it is based on perception, but it is possibly the most important. Consistency is key, so developing a clear measurement scale and looking at the same attributes for each hire is important.



Cost of hire

Cost per hire refers to the total cost relating to securing the candidate. This includes advertising the role, resume filtering, candidate screening and matching, interview time, travel costs, testing and hiring administration. By monitoring these for every placement, you can begin to see if costs are consistent across hires or fluctuate dependent on role level, department or skill-set type. It is also effective in identifying where efficiencies could be introduced.



Time with business

The last component to consider in an ROI measure is time with the organisation. Obviously, as an employee’s length of tenure increases, so does their ROI. When spread over a five-year employment period, a substantial cost per hire can be less significant, compared to an easier and cheaper hire who then leaves the business within eight months, so that hiring investment needs to be made again. This is why retention strategies continue to be a growing focus for future-focused businesses.

As businesses continue to evolve and place greater importance on reflection, insight and learnings, the need for ROI measures across all disciplines becomes greater. These four measures provide a solid base to build a measurement platform that provides consistency and universal areas of focus, no matter what department or title.