Ever since the market for developers experiences such a gap and there are so little potential candidates out there, managers stopped consider the cost of hiring one programmer. If you talk to them, they will justify this by saying that the benefit of hiring a developer far exceeds the money spent on doing so.
In reality, however, the cost is very relevant to your recruiting strategy and this is why you should pay more attention to it. Even though the cost per hire (CPH) is not the only way to measure return-on-investment (ROI) as there are quite a few other success factors to consider, it plays an important role Knowing this figure can help you make smarter investment decisions, define your referral bonuses and save your organization money in the long run.
Get a better understanding of the real cost of a bad hire
Lately, people focus on the subject of quality-of-hire. Since the goal is not only to fill up a position but to find a right fit, many say that you can go over budget as long as your company acquired a good developer.
While this makes sense, you should also keep in mind your return on investment. Making a bad hire will eventually cost you more. Losing a developer will also take a toll on your overall profit because you will lack productivity and will have to invest in another recruitment and hiring process.
Having a good sense of how much it costs you to hire a dev, gives you a better image of how to adapt your screening and recruiting process in the future. Because a professional that is not the right fit for your particular position will drain you after.
Justifying the money spent on recruitment
There isn’t a moment when your team does not need new recruits and, additionally, a budget for it. But in order to receive an increased budget, you need to show the ones in charge that your hiring history is clean and effective.
Not knowing the price per hire will not present you in a good light. A graphic of the number of applications, interviews conducted, potential candidates and final hires tells a story about your approach.
When you plan on stepping up your recruiting strategy and you already know how much you spend on new hires, the managing board will be happy to let you try a new approach that might reduce costs significantly.
With data such as cost-per-hire, it is easier to find the appropriate tools for your team. As a manager, you will be successful in getting new talent while the team will increase productivity because the right people are in the right positions. You can now ass to your portfolio the strategic planner and talent acquisition expert skills.