What should a finance leader measure beyond cost per hire?

Cost per hire gives heads of finance a useful starting point for understanding hiring expenditure. Add together all relevant costs, divide by the number of appointments, and you have a figure – in absolute or percentage of salary terms – that can be tracked over time.

This figure, however, does not paint the full story. It doesn't tell you whether hiring is helping the business grow, whether spending is directed towards the most effective candidate sources, or whether hiring activity generates any financial return, directly or indirectly.

A lower cost per hire might reflect greater efficiency. It might also reflect placing easier vacancies while commercially more important positions remain unfilled. Equally, a more expensive appointment could be justified if it brings transformational capabilities the business needs to strengthen current position or to enter a new market.

The challenge is to fully connect hiring reporting with business performance.

Measure the cost of the gap

An unfilled position has consequences beyond the hiring budget. It's an opportunity cost, delaying projects, constraining sales capacity or increasing reliance on contractors and overtime.

Finance and hiring teams should therefore consider vacancy duration – time to hire but also opportunity cost of an unfulfilled hire – alongside its operational impact. Estimates will involve assumptions of course, but making those assumptions explicit supports better decisions about where hiring is working best.

Understand which sources contribute

Reporting should also distinguish between direct applicants (usually driven from job boards or LinkedIn), employee referrals, internal appointments, recruiter-introduced candidates and shared candidate pools (more on these pools later).

Application volume alone says little about their contribution. More useful measures include progression to interview, accepted offers, time to appointment and subsequent retention.

Comparisons need context, or else you're comparing apples and oranges. For example, an external recruiter handling a specialist vacancy should not be judged against referrals for familiar, frequently recruited roles. The aim is to understand which routes work for which needs.

Track income and net hiring costs

Hiring has always been considered an expense, but where such activity can generate income, that should be visible alongside expenditure. How so?

Suitable applicants who were unsuccessful for one vacancy may be valuable to another employer. If an agreed introduction model produces a fee and the contributing employer receives a share, hiring creates a measurable financial return.

Heads of finance can then report gross hiring expenditure, income earned and net hiring cost separately. Keeping these figures distinct makes the economics clearer and plots a path to return on hiring investment.

Put the measures into practice

PAIR.cloud provides this measurable approach and sits alongside an employer's existing ATS, meaning adoption creates zero upheaval.

Employers continue to manage direct applications through their ATS. With PAIR, they can manage external recruiter candidate workflows properly and access shared candidates from a pool where they and other employers have recorded suitable unsuccessful direct applicants (with candidate permission and appropriate data protection arrangements). External recruiter placements can generate income for employers using PAIR.cloud, as can qualifying pool placements for the employer who contributes the initially unsuccessful candidate. This has the potential to eliminate your existing hiring software costs.

The question for finance leaders is whether income and broader candidate access improve the return on existing hiring investment. We think the answer to that question is a yes.

Apply for the PAIR.cloud trial to earn from every hire.