Create Recruitment Cost Calculation

Title:
  Date:
Format: 11/20/2018
 
Steps

MCPCC Recruitment Cost Calculator

Purpose
Use the Recruitment tool to estimate the average cost (value) to recruit one new operator. Knowing the true cost to the organization of acquiring a new operator is a useful metric because it not only yields insight into recruiting effectiveness, it also gives management an appreciation of the dollar value to the organization of retaining their existing employees.

More important, perhaps, knowing this value makes it easier for management to calculate the business benefit and the return on investment (ROI) of developing or purchasing training or HR solutions designed to improve operator recruitment efficiency / effectiveness or to reduce the annual rate of operator turnover.

Note:

All required mathematical calculations will be automatically performed by this Calculator based on your input of requested data.

In order to develop the cost of recruiting one new hire, consider all the costs associated with recruitment (advertising, administration, testing, training, etc.) over a specific period of time, for example, over the first six months of the calendar year, or one fiscal quarter (e.g., Quarter 2). This period will be referred to in this Calculator as the Selected Timeframe. Your organization's administrative records should provide the appropriate cost data in each of the required categories over the Selected Timeframe you have chosen.

The goal is to try to capture all the recruitment/training expenses in order to reflect the full cost to the organization of hiring one new Driver/Operator.

Notes:

In order to calculate the real cost of hiring one new candidate, it will be important to factor in the total cost of processing all applications received during the Selected Timeframe including not only the successful candidates, but also those unsuccessful applicants who are progressively eliminated in the various stages of the selection process.

Enter Selected Timeframe below:

Timeframe Start Date:
Timeframe End Date:

 

Definition: Successful Hire
In order to develop a conservative figure for the full cost of recruitment, this Recruitment Calculator considers only Successful Hires. For this Calculator a Successful Hire is a new Driver/Operator who completes the application, screening, training, and orientation processes and who remains with the organization for at least 90 days after being hired. (This definition excludes those new hires that choose, or are asked, to leave the organization within the first three months of employment.)

Please enter the number of Successful Hires who applied for Driver/Operator employment during your Selected Timeframe, and became Successful Hires as defined above. (This number should be readily available from Human Resources records).

Number of Successful Hires

Recruitment Promotion / Advertising Costs

(Based on selected Recruitment Timeframe)

  Amount  
Media Advertising
(Newspapers, Magazines, Internet, etc.)
$
 
Brochures and Materials $
 
Agency Fees $
 
Referral Fees/Bonuses $
 
Career Fairs $
 
Signing Bonuses $
 

Other Costs

Please use the extra boxes provided to enter additional
cost categories and associated values.

Item   Amount  
$
 
$
 

Total

Total Promotion Costs $
 
Promotion Costs per Successful Hire $
 

Step 2 Applicant Processing

Prescreening

Please enter appropriate average values for staff wages and processing time per applicant at each Prescreening and Interview stage.

Note: The ‘Number of Applicants’ will progressively be reduced as you move down through each Prescreening and Interview stage. The first entry in the ‘Number of Applicants’ column should be the total number of employment applications received during the Selected Timeframe. In subsequent Prescreening and Interview stages, the values entered in the ‘Number of Applicants’ column should progressively diminish, reflecting the successive elimination of some applicants during each Prescreening and Interview stage.

Average Number
of Applicants
(At each pre-
screening stage)
  Average
Hourly Wage
of Screener
  Time to Process
One Applicant
(Minutes)
   
Application Review/Screening
$
 
$
 
Telephone Review
$
 
$
 
Background Checks (criminal, driver's, abstract, etc.)
$
 
$
 

Interviews

Number of Applicants (At each interview stage)   Average
Hourly Wage
of Interviewer
  Average Time
Required Per
Interview
(Minutes)
   
In-Person Interviews
$
 
$
 
Final Evaluation/Selection
$
 
$
 
Reference Checks
$
 
$
 

Please use the boxes below to enter additional
cost categories and their associated values.

Additional cost Categories Number of
Applicants
  Average Hourly
Wage of
Processor
  Average Time
Required per
Applicant
(Minutes)
 
$
 
$
 
$
 
$
 

Total

Total Cost of Applicant Processing
(Totals of Prescreening & Interviews)
$
 
Total Cost of Applicant Processing per Successful Hire $
 

Step 3 Testing / Screening

Testing / Screening

Please enter the number of applicants, in your selected Recruitment Timeframe, who have successfully completed the initial Applicant Processing phase and continue on as Candidates in the Testing/Screening phase.

Please Note: While the initial number of candidates may change throughout the Testing/Screening process, for simplicity we will use the number of candidates remaining after Step 2: Applicant Processing.

Number of Candidates remaining
after Applicant Processing
(Pre-screening & Interviews)
INTERNAL COSTS   Average Hourly
Wage of
Administrator
  Time Required
per Candidate
(Minutes)
Number of
Remaining
Candidates
 
Pre-Employment Testing $
 
$
 
Driver Testing $
 
$
 
HR Documentation/
Processing
$
 
$
 
Total Internal Costs $
 

Outsourcing Expenses

    Cost per
Candidate
  Number of
Remaining
Candidates
  Total  
Pre-Employment Testing $
 
$
 
Drug Screening Test $
 
$
 
Medical/Physical Exam $
 
$
 
Vision Exam $
 
$
 
Total Outsourcing Costs       $
 

Please use the empty boxes provided to enter
additional cost items and associated values.

Item   Average Hourly
Wage of
Administrator
  Time Required
per Candidate
(Minutes)
Number of Remaining Candidates   Total  
$
 
$
 
$
 
$
 
$
 
$
 
Total costs, "Other" $
 

Total

Total Cost of Candidate Testing/Screening (Internal, Outsourcing & Other) $
 
Total Cost of Testing/Screening per Successful Hire $
 

Step 4 Determine unit dollar value of Unit of Improvement

Introduction

This Step will enable calculation of the full cost of training your New Hire Trainees.

Key Definitions

  1. New-Hire Trainees  are so designated by this Calculator as those applicants who have successfully progressed through the Applicant Processing, Testing, and Screening Steps to earn acceptance into the Training and Orientation stages as new recruits.

  2. Training Session:  The term Training Session refers to your standard multiple-day [classroom plus driving instruction ] training program for New Hire Trainees. The volume of New Hire Trainees generated from all Driver/Operator applications received during your Selected Timeframe may have required you to provide more than one Training Session.

  3. Instructor Days:  The determination of Instructor Days refines the calculation of Instructor [classroom and vehicle] costs for Calculator application. A typical multiple-day training program may involve different numbers of instructors on a given day, depending on that day’s course content. Calculate ( incorporate estimates as necessary ) the number of Instructor Days per your standard Training Session as follows:
  • Identify all instructors utilized.
  • List the total hours of classroom and/or vehicle instruction provided by each.
  • Cumulatively total instructors’ hours, divide by 8, round to nearest whole number.
  • Instructor Days per your standard Training Session.

Note: For simplicity, this Calculator ignores trainee attrition which is typically observed during the training process.

Key Elements

In order to complete this Calculator Step, you will first need to provide a number of key elements. Using Human Resources and/or other source data, please enter the required values for the following:

1. The total number of New-Hire Trainees resulting (now remaining) from all Driver/Operator applications received during the Selected Timeframe.
2. The number of days in a Training Session for New Hire Trainees.
3. The number of Training Sessions conducted for the New Hire Trainees (Identified in Item 1).
4. The typical number of instructor training days (Instructor-Days) required for each New Hire Trainee training session.

Instruction Costs

  Average
Daily Wage
of Instructors
  Number of
Instructor-Days per
Training Session
Total Number
of New-Hire
Training Sessions
 
Cost of instructors' wages $
 
$
 

Other Instruction Costs (College courses, vendor delivered training, etc.)

Description   Cost  
$
 
$
 
Total Instruction Costs $
 

Trainee Compensation

  Daily Trainee
Compensation
  Number of Days
per Training
Session
Total Number
of New-Hire
Trainees
 
Training (Classroom & Driving) $
 
$
 
Total Cost of Trainee Compensation $
 

Accommodation, Meals & Travel

Cost for New Hire Trainees

  Average costs
or Allowance
per Day
  Number of
Training Days
Total Number of
New-Hire Trainees
 
Meals $
 
$
 
  Average costs
or Allowance
per Day
  Number of
Training Days
Total Number
of Applicable
New-Hire Trainees
 
Accommodation $
 
$
 
  Typical Travel
Allowance
per Trainee
  Total Number
of Applicable
New-Hire Trainees
 
Travel $
 
$
 

Costs for Instructors

Enter the total Training Instructor costs/expenses paid out  for all Training Sessions during the Selected Timeframe for the following expense items:

Expense   Amount  
Meals $
 
Accommodation $
 
Travel $
 
Total Cost of Accommodation, Meals & Travel $
 

Training Vehicle & Fuel

  Average cost
per vehicle
per day
  Number of
Vehicle-Days1 per
Training Session
Total Number
of Training Sessions
 
Cost of Training Vehicle $
 
$
 
Cost of Fuel $
 
$
 
Total Costs of Vehicle & Fuel $
 
1 Note:
  • A Vehicle-Day is the equivalent of one vehicle in use for one day.
  • Example 1 – Two vehicles used for one-half day each = 1 Vehicle-Day
  • Example 2 – Two vehicles used for one day each = 2 Vehicle-Days

Total

Total Instruction Costs $
 
Total Cost of Trainee Compensation $
 
Total Cost of Accommodation, Meals & Travel $
 
Total Cost of Vehicle & Fuel $
 
Total Cost of New-Hire Training $
 
Total Training Cost per Successful Hire $
 

Step 5 Calculate first year dollar value

Use this step to calculate the cost of orienting and provisioning those New-Hire Trainees who have completed “basic training.” These costs include salaries of facilitators and new hires while attending the Orientation session(s).  (Note: For the purpose of this Calculator, the number of “New Hires” is the same as the number you supplied in Step 4: Introduction.)

  Average per
Diem Salary
  Number of Days
per Orientation Session
Number of
New Hires
 
Participant Costs $
 
$
 
    Number of
Orientation Sessions
in Selected Timeframe
     
Total Facilitator Loaded Wages per Orientation Session $
 
$
 

Please use the boxes provided to enter additional Orientation cost items and their associated values.

Description of
Additional Cost Items
  Cost of Additional Item
per New Hire
  Number of
New Hires
  Total  
$
 
$
 
$
 
$
 
Total Orientation Cost $
 
  Average Cost
of Item
  Number of
New Hires
 
Uniform and Footwear (cost or allowance) $
 
$
 
Other (licence fees, ID cards, equipment, etc.) $
 
$
 

Please use the empty boxes provided to enter additional Uniforms, Equipment, Licences cost categories and their associated values.

Item   Amount   Number of
New Hires
 
$
 
$
 
$
 
$
 
$
 
$
 
Total Cost for Uniforms, Equipment & Licences $
 

Total

Total Cost of Orientation, Uniforms, Equipment &
Licences for all New Hires
$
 
Total Cost of Orientation & Uniforms, Equipment &
Licences per Successful Hire
$
 

Summary

Recruitment Cost Summary

Costs of successfully hiring one new Driver/Operator:

1. Promotion $
 
2. Applicant Processing $
 
3. Testing/Screening $
 
4. Training $
 
5. Orientation/Equipment $
 
Total Cost to Recruit One Driver/Operator (Successful Hire) $
 

Transfer to MCPCC ROI Forecast Tool
If you are using this tool in conjunction with the MCPCC ROI Forecasting Tool. Click the button (below) to automatically transfer the value of the Recruitment Cost to the appropriate Step in the ROI forecasting process.

[Save and Transfer Recruitment Cost]

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