The Use of A Dynamic Recruiting Calculator

• Posted by ReCalc LLC April 1, 2022 Filed in Other #recruiting calculator  #staffing calculator  #employer payroll tax calculator  #burden rate calculator  #Calculate employers taxes  141 views
  click to rate

  A company's most valuable asset is its workforce. It is taken for granted that when a company needs people, it has to get the best people. Else, productivity would be endangered and expenditures increase. Since it is the HR department's domain to hire people for the organization, it is their job to protect the business from these probable losses. The HR recruitment staff cannot just accept or reject applicants without a fair measure. Hence, recruitment metrics come about.

   

  Cost-Per-Hire

   

  Although there are several different types of metrics, they work towards one common goal. That goal is getting the best, if not the very best, applicant for a job. The process of recruiting people in the past had slightly limited metrics to cost-per-hire. Cost-per-hire, as its name indicates, computes the recruitment cost with respect to the positions filled. This is the most common measure in hiring that involves the use of a smart recruiting calculator. 

   

  Given the several direct and indirect costs involved in hiring, there is no standard formula for calculating this expenditure. Although this measure is crucial, it has one serious defect. It focuses specifically on the initial cost of hiring. It ignores taking into account the long-term costs, for example, whether the recruit will be productive or not.

   

  Gross Margin Percentage

  How is your organization doing? Simple question, right? Anyways, how can you accurately measure success in your staffing firm? Sales revenue? Gross profit dollars? Gross margin percentage? Mark-up percentage? Net income? In the staffing industry, you can measure a hoard of metrics. There may be sales metrics. Recruiting metrics. And a whole host of varied financial metrics. There may be backward-looking metrics that tell you how you are presently doing. Also, forward-looking performance indicators allow you to forecast how you will be doing.

   

  

   

  In the staffing industry, sales revenue gives a nice “feel good” metric. However, it tells you nothing about the strength of a specific staffing business. Why this is so is because sales revenues don’t account for various differences indirect expenses from one firm to another. For instance:

   

  • Temporary wages and payments may differ significantly from one staffing firm to another. Perhaps even from one job order to another within a staffing company.

  • Workers’ compensation costs will vary relying on a staffing agency’s business mix, location, and experience modifier.

  • State unemployment insurance costs will differ relying on location and experience.

  • Additional direct expenses like administrative fees to a VMS (Vendor Management System) paid to contractors.

   

  That is why it is encouraged to focus on their gross margin percentage and gross profit dollars each month by using the gross margin percentage calculator. Gross profit equates to sales revenue excluding the direct costs related to those sales. These direct costs comprise temporary employee wages, workers’ comp. Also FICA, federal unemployment, state unemployment, health, and other insurance costs including VMS fees. Gross margin is the percentage of gross profit divided by sales revenue.

   

  Gross profit dollars basically measure the revenue in hand to run the staffing company. They can be measured at the level of a branch, service line, or for the company altogether.

   

  When evaluating gross profit, it is suggested to take a look at the industry benchmarks to find out how well they are doing. In relation to other similar businesses. Including seeing the monthly and quarterly trends to ensure their business is treading in the right direction. One key point about measuring gross profit and gross margin. Measure direct hire fees as a separate identity from temporary staffing gross margin. “Perm fees” skew gross margin calculations and the result is also a feel-good measure. By looking higher than your primary business, contract staffing actually is. It is not possible to review trends unless you distinguish both.

   

  The Bottomline

  There are many other important recruitment metrics that are in practice nowadays. Keep it in mind that measuring recruitment through a dynamic recruiting calculator is not simply about reducing costs. But it also helps establish a standard or a platform on what kind of employee to recruit. This aligns the Human Resource staff to the requirements of the operations team. Simply put, the higher the standard is, or the more the new hires are meeting the standard, the better is an operation going to be.