How Much Should You Pay Per Hire?

vested

by vested

What’s the right answer to “How much should you pay per hire?”


Some teams are completely opposed to paying any amount for recruiting!  This puts a strain on recruiting/HR teams and can really hamstring an organization. One way to combat this mentality is to demonstrate ROI on recruiting spend.

 

At Vested, we’ve been through this exercise with several of our clients which is why we came up with a simple framework that you can download (ROI Calculator) to help you think through this budgeting decision.

 

For simplicity, let’s pretend you are deciding to use a third party recruiter for a hard-to-fill role but are concerned with how to justify the fee.

Why Do Third Party Recruiters Exist?

 

To save time!  That’s literally it.  Given an unlimited amount of time (meaning there’s no urgency to hire), a company with a dedicated recruiter and LinkedIn can hire for any role.  Seriously!

 

Third party recruiters are willing to work and get paid to help you hire employees that are valuable to your business.  It takes some work to vet out the good from the bad but they do serve a real purpose.

 

So what’s the best time to use third-party recruiters? 

 

When there’s urgency to hiring the role!

If you’re in HR, you’re working on multiple roles with hiring managers telling you there’s urgency in every role you’re working on.  Here’s the truth — until there are real bottlenecks in growing your company, the pain and urgency can be managed!

 

What we mean by this is that certain roles can take precedence over others in the mind of an executive team.  You’ll find this to be particularly true in sales and engineering teams. The former drives revenue, the latter builds product.  

 

Download Vested’s ROI Calculator 

 

The spreadsheet will show you the cost of a sales vacancy for your organization.  For our particular example, we used a Sales Development Rep – an easier role to fill, but one that has a lot of impact from a revenue perspective.

 

We would love to hear what you think about it or if you’d like us to create something that reflects your org, just let us know too!

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