Organisations hiring in Asia face tremendous competition for talent, but are also under pressure to decrease their expenses. Too often, they sacrifice the quality of their workforce by reducing cost-per-hire. But there is a better way. By measuring the right data, organizations can develop a talent acquisition process that increases the quality of candidates and saves money in the long run. Sharing this information with executive leadership will validate HR’s role in driving organisational performance.

1. 0WE BECOME YOU™Content Property of Cielo, Inc.
OVERCOMING ASIA’S
COST-PER-HIRE DILEMMA
@CieloTalent
#talentmindset
Organisations hiring in Asia face tremendous competition for talent, but
are also under pressure to decrease their expenses. Too often, they
sacrifice the quality of their workforce by reducing cost-per-hire.
By measuring the right data, organizations can develop a talent
acquisition process that increases the quality of candidates and saves
money in the long run. Sharing this information with executive
leadership will validate HR’s role in driving organisational performance.

2. 1WE BECOME YOU™
TODAY’S PRESENTER
Sadaf Pitt
Client Solutions Director, Cielo
@PittSadaf
• Sadaf is on a journey to elevate Talent
Acquisition across Asia. She strongly
feels that the HR/Talent function needs
to go beyond reactive and
transactional Talent Acquisition
practices and adopt a Talent
Acquisition engine aligned to business
outcomes.
• Architects strategic talent acquisition
solutions that lead to improved
performance, growth, and competitive
advantage.
• Collaborates with the C-Suite and
Function Heads across Asia’s MNCs
who are ready to explore how
transforming their existing talent
acquisition practices can deliver
exceptional business results.

3. 2WE BECOME YOU™
IN RECRUITING, HOW IMPORTANT IS COST-
PER-HIRE?
I believe cost per hire is a misguided means to
judge recruiting department performance.
For one, it rewards the wrong things and
ignores quality of candidate and quality of hire.
For another, it’s far too tactical and narrowly
focused. Worse, improving costs could
degrade quality.
Lou Adler
“
”

4. 3WE BECOME YOU™
• Examine how the importance of Cost-Per-Hire depends
on the talent you need to hire
• Demonstrate how a low Cost-Per-Hire can actually be
more expensive in the long run
• Identify the components you should use to calculate
Cost-Per-Hire
• Understand the potential business impact of having a
high-performing talent acquisition function
THIS WEBINAR WILL HELP YOU…

5. 4WE BECOME YOU™
WHAT IS ROI IN HIRING?
COST
QUALITY
AGILITY
Agility is the
measurement of the
speed at which the
resourcing function’s
strategy and
activities are
capable of
responding to
changes in business
demands
Quality drivers sit across a
number of measures e.g.
candidate & hiring manager
experience, new hire attrition,
new hire performance, source
of hire, employer brand, NPS,
conversion rates
True Cost of Hire is
a complex calculation
including team costs,
operational cost of
line management,
marketing spend, and
supplier costs
The Perfect Balance?
Difficult to achieve, but
then, it is not often the
target. Business drivers
inevitably lead to a
weighted model with
importance of Cost, Agility
& Quality depending on
what talent you are hiring

6. 5WE BECOME YOU™
1. Calculation Methodology
2. Employee Function
3. Region
4. Industry
5. Type of Hire
DRIVERS OF DIFFERENCES
IN COST PER HIRE
WE BECOME YOU™

7. 6WE BECOME YOU™
COST PER HIRE VARIES BY ROLEImportanceofcostperhiredecreases
Importance of cost per hire decreases
Scarcity
Seniority
Expert One
Skilled Few
Talented Many
Approach
• Investment
• Complexity
• Time
• Resources
Delivering quality
hires consistently
is perceived as the
most important
strategic function
of talent
acquisition for all
stakeholders (C-
Level, Business
Unit Leaders and
Talent Acquisition
Leaders)
Cielo’s Talent
Acquisition 360
Research
“
”

8. CALCULATING COST PER HIRE
Cost Per Hire =
( )∑(External Costs) + ∑(Internal Costs)
Total Number of Hires in a Time Period
External Costs Internal Costs
• Pre-hire Health
Screens
• Pre-Screening
• RPO fees
• Relocation Fees
• Sign-on bonuses
• Sourcing Costs
• Travel & Expenses –
Candidate
• Travel & Expenses –
Recruiter
• Technology
• Third-Party Agency
Fees
• Advertising &
Marketing
• Background &
Eligibility Checks
• Campus Recruiting
• Consulting Services
• Contingency to
Regular Fees
• Drug Testing
• Employee Referral
Awards / Payments
• Immigration Expenses
• Job Fairs / Recruiting
Events
• Cost of Recruiting
Staff
• Cost of Sourcing Staff
• Internal overheads
• Non-labor office costs
• Recruiting L&D
• Secondary
Management – Cost of
Time for Events
• Secondary
Management – Cost of
Time for Recruiting
# of Hires
• Total number of hires in
a time period
• New hires
• Backfill due to
attrition
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9. 8WE BECOME YOU™
1. Aggregate - Total number of hires during a specific time
2. Recruiter hiring activities
3. Type of Hire
4. Organizational Unit or Geographic Region
5. Requisition – recorded based on each requisition filled
COLLECTING COST-PER-HIRE DATA

10. 9WE BECOME YOU™
1. Shift talent acquisition budget allocation
2. Low-cost sourcing channels and branding opportunities
3. Present non-obvious hires
4. Outsourcing
COST PER HIRE TO INFLUENCE
HIRING DECISIONS

11. 10WE BECOME YOU™
1. Market-entry decision
2. Internal skills development
3. Setting up new operations
4. Improving talent strategy
COST PER HIRE TO INFLUENCE
BUSINESS DECISIONS

12. 11WE BECOME YOU™
1. Is the organization facing new competition?
2. Is the organization changing strategic direction?
3. Is the organization entering a new market?
4. Is the organization growing rapidly?
COST-PER-HIRE TO SUPPORT
CORPORATE STRATEGY

13. 12WE BECOME YOU™
1. Time-to-Fill
2. Interview-to-Offer Ratio
3. Retention Rate
4. Hiring Manager Satisfaction
5. Candidate & New Hire Satisfaction
6. Cost-Per-Vacancy
KEY COST REDUCTION METRICS
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14. 13WE BECOME YOU™
1. Lost productivity of vacant role
2. Coworkers’ lost productivity due to coverage of vacancy
3. Line manager’s lost productivity due to vacant position
4. Direct reports’ lost productivity due to vacant position
5. New hire learning curve
6. Team’s lost productivity due to new hire onboarding
COST-PER-VACANCY KEY CONSIDERATIONS
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15. 14WE BECOME YOU™
WHAT ARE THE CHARACTERISTICS OF AN
OPTIMIZED TALENT ACQUISITION FUNCTION?
Source: Bersin by Deloitte, 2014.
New-Hire
Turnover
TimetoFill(in
Days)
18
%
16
%
14
%
12
%
10
%
8%
6%
4%
2%
0%
60
50
40
30
20
10
0
17%
44
55
Level 1 –
Reactive
Tactical
Recruiting
Level 4 –
Optimized
Talent
Acquisition
Cost-Per-Hire
$3,258
10%
Mature Talent Acquisition
organizations spend more by hire
But, maturity brings better quality
of hire and increased agility
Cost-Per-Hire
$6,465

16. 15WE BECOME YOU™
WHAT ARE THE CHARACTERISTICS OF AN
OPTIMIZED TALENT ACQUISITION FUNCTION?
Source: Bersin by Deloitte, 2014.
New-Hire
Turnover
TimetoFill(in
Days)
18
%
16
%
14
%
12
%
10
%
8%
6%
4%
2%
0%
60
50
40
30
20
10
0
17%
44
55
Level 1 –
Reactive
Tactical
Recruiting
Level 4 –
Optimized
Talent
Acquisition
Cost-Per-Hire
$3,258
10%
Mature Talent Acquisition
organizations spend more by hire
But, maturity brings better quality
of hire and increased agility
Cost-Per-Hire
$6,465
2x
40%
20%
Spend per hire equates to:
Less new-hire attrition
Faster time to fill
What is the potential cost impact?

17. 16WE BECOME YOU™
LET’S TAKE TWO SIMILAR COMPANIES
ABC, INC.
• $1Bn Turnover
• 10,000 employees
• 1,000 annual hires
• Average compensation = $50k
“Optimized” Talent Acquisition Function
• Average CPH = $6,465
• Average new hire attrition = 10%
• Average Time to Fill – 44 days
XYZ, INC.
• $1Bn Turnover
• 10,000 employees
• 1,000 annual hires
• Average compensation = $50k
“Reactive & Tactical” Recruiting Function
• Average CPH = $3,258
• Average new hire attrition = 17%
• Average Time to Fill – 55 days
…now let’s compare based on cost, quality & agility measures

18. 17WE BECOME YOU™
ABC, INC. SPENDS 2X MORE
ON HIRING THAN XYZ, INC…
…what impact does this extra investment have on quality?
1,000 1,000
$6,465 $3,258
$6,465,000 $3,258,000
+$3,207,000 -$3,207,000
Cost Per Hire
Number of hires per annum
Average Cost Per Hire
Total Annual Cost Per Hire
Difference – ABC, Inc. vs XYZ, Inc.
Average Cost Per Hire figures taken from Bersin by Deloitte

19. 18WE BECOME YOU™
LET’S LOOK AT THE QUALITATIVE
ELEMENT HIGHLIGHTED BY BERSIN
First year turnover is a good indicator of quality.
Turnover is expensive.
The average cost of replacing a
departing employee is
$48,982
Source: Telegraph.co.uk reporting on 2014 Oxford
Economics Study
The average cost of turnover for
new hires is equivalent to
to times the annual pay of
the departing employee
one
1½
Source: PwC Saratoga
…what impact does this have on our example?

20. 19WE BECOME YOU™
40% LESS NEW HIRE TURNOVER
EQUATES TO $4.4M
…what about the impact of Agility as measured by Time to Fill?
1,000 1,000
10% 17%
$6,250,000 $10,625,000
-$4,375,000 +$4,375,000
Cost of First-Year Attrition
Number of hires per annum
First-Year Attrition Rate
Total Annual Cost of Y1 Attrition
Difference – ABC, Inc. vs XYZ, Inc.
First-Year attrition figures taken from Bersin by Deloitte
100 170
$50,000 $50,000
Number of Y1 leavers
Average Annual Salary
1.25 1.25Cost of attrition – salary multiplier

21. 20WE BECOME YOU™
20% FASTER TIME TO FILL
EQUATES TO $2.5M
$1Bn $1Bn
10,000 10,000
44 days 55 days
$20,000,000 $25,000,000
Total Annual Revenue
Number of employees
Average Time-to-Fill
Lost Gross Opportunity Revenue
Average Time-to-Fill figures taken from Bersin by Deloitte
$100,000 $100,000
$455 $455
Average annual revenue per employee
Average revenue per employee day (220 days)
1,000 1,000Number of annual hires
$227 $227
$10,000,000 $12,500,000
Average cost per employee day (220 days)
Total salary saved for open roles
$50,000 $50,000Average annual salary
$10,000,000 $12,500,000
-$2,500,000 +$2,500,000
Lost Net Opportunity Revenue
Difference – ABC, Inc. vs XYZ, Inc.
Lost Opportunity – Time to Fill

22. 21WE BECOME YOU™
WHO HAS BETTER QUALITY HIRES?
COST
QUALITY
AGILITY

23. +$3,207,000 -$3,207,000
-$4,375,000 +$4,375,000
-$2,500,000 +$2,500,000
-$3,668,000 +$3,668,000
Difference in Cost Per Hire
Difference – First-Year Attrition
Difference – Lost Opportunity/Time to Fill
Total Difference – ABC, Inc. vs XYZ, Inc.
Despite spending 2x more on its talent
acquisition program, the actual cost to
ABC, Inc. is $3.7M less per annum than
XYZ, Inc.
$3.7M
WHICH COMPANY COMES OUT ON TOP?
The Results

24. 23WE BECOME YOU™
Source: Boston Consulting Group
1
2
3
4
5
6
Delivering on Talent Acquisition
Onboarding of new hires and retention
Managing talent
Improving employer branding
Performance management and rewards
Developing leadership
3.5x 2.0x
2.5x 1.9x
2.2x 2.1x
2.4x 1.8x
2.1x 2.0x
2.1x 1.8x
Topic in which most capable and least
capable companies were compared
The impact that the most capable companies
achieve over the least capable companies
… revenue growth … profit margin
Economic influence is noticeable in all HR topics…
but is most pronounced in six:
EXCELLING AT TALENT ACQUISITION
LEADS TO POSITIVE BUSINESS OUTCOMES.

25. 24WE BECOME YOU™
1. A balanced Talent Acquisition strategy is an optimized blend of cost, agility
and quality – the balance varies depending on the talent you are hiring
2. If you are going to measure cost per hire, make sure you include all the
relevant external and internal components
3. Investing more on Talent Acquisition can improve quality of hire, increase
agility and consequently be less costly in the long run
4. Excelling at Talent Acquisition can have a significant and positive impact
on business performance
5. Within HR, Talent Acquisition is arguably the function that can provide the
best return on your investment
KEY TAKEAWAYS
If you can’t measure it, you can’t manage it.
“ ”Peter Drucker

26. 25WE BECOME YOU™
THANK YOU
cielotalent.com