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ANSI/SHRM 06001.2012, Cost-per-Hire

    

Designed as a tool to allow an organization to determine accurate and comparable costs of recruitment through a standard algorithm to calculate of the recruiting costs to be incorporated into cost-per-hire. Standard is structured at a high level. Specific consideration and responses are also addressed for consideration by individual organizations based on specific hiring environments and requirements.

Errata: On page 16 of the standard, in Table 4, the first column should be labeled "Internal Costs", not "External Costs"

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Standard Interpretation

The following request for interpretation of the Standard was received on March 21, 2013.

"Our company is looking at implementing a standard measure for Cost Per Hire.  Due to CPHCs ability to measure across organizations; we thought it would be the best formula/model to use in order to capture cost across our different global businesses (example – Power, Oil Gas & Chemicals, Mining & Metals, etc).  The CPHC does not include cost such as Immigration and Pre-Health screenings as part of external cost; our company spends a large amount of money on items such as immigration fees and pre-health screenings for our international projects and would like to be able to incorporate it.  Is it appropriate to include these costs as part of our Cost per Hire?"

The requestor attended the Staffing and Workforce Planning Taskforce meeting in April, 2013, and provided additional clarification about the question. The Taskforce provided the following interpretation:

"The Taskforce has reviewed this interpretation request (Cost Per Hire ANSI/SHRM-06001-2012I01) and resolves that the standard allows the user to apply the CPHI algorithm rather than the CPHC algorithm to calculate Cost Per Hire, if there are unique costs that are understood to be essential in accurately and comparably representing staffing costs within their own organization, business sector, or industry.  The CPHC approach shall still be used to compare costs outside of these parochial interests, for example across business sectors.  No change will be made to the existing standard."

The following request for interpretation of the Standard was received on October 4, 2013.

"I am trying to calculate cost per hire for college professors (Faculty).  One true cost we often incur is the temporary lecturer that is hired to cover the necessary classes while we search for a new faculty member.  Faculty are usually hired on September 1 of each year. If we don’t make a hire for the upcoming academic year (starting September 1) we will hold the search for the following year and hire lecturers.  Any thoughts on this and if it would be appropriate for me to add the cost of the lecturers in to the calculation?"

The Taskforce provided the following interpretation:

"The Taskforce has reviewed this interpretation request (Cost Per Hire ANSI/SHRM-06001-2012I02) and resolves that the standard does not allow the cost of a temporary lecturer (or any staff augmentation expense) to be included in the Cost Per Hire (CPH) calculation.  Costs such as these are considered “opportunity cost” and the taskforce determined that opportunity costs would not be included in the CPH calculation.  To quote from the standard, “Cost-per-hire is a measure of the effort exerted, defined in financial terms, to staff an open position in an organization.”  No change will be made to the existing standard.

 

 

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