Cost benefit analysis of

recruitment sources
 Introduction
 Cost benefit analysis determines the source of recruitment.As the process of
recruitment starts by discovering the sources for required manpower,thus the
search should be rigorous.
 Internal sources are many times overruled by the organisations.One of the
reason is that the search is restricted within the company and limited to the
suitable existing employees.
 External search can be done in various ways.Some of them are employee
referrals,campus recruitment,placement agencies and advertisement.
 Advertisement are considered to be most effective and common part of
recruitment process.
How to measure the effectiveness of
recruitment process?
There are three ways:-
1. Yield ratio
2. Cost of recruitment or hire and
3. The quality of hire
Yield ratio
It helps to determine which recruiting methods
produce the most qualified applicants.To determine
this ratio the percentages of applicants from each
recruiting source are calculated and then compared.
 For eg. If ABC company used advertisement and also college recruiting
to fill a position yield ratio would be calculated for each method.
Cost of recruitment or hire
It is calculated by adding the total advertising
costs,i.e.cost for all the agencies,the incentives paid to
employees for referrals,and then dividing that total by
the number of new hires brought on during the period
in question.
Quality of hire
This measure can provide management with an
assessment of the quality of new employees being
recruited and hired.
The percentage of quality of hire is a relative value.it
will be up to the management to determine whether
this represents an excellent,good,fair or poor level.