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Post by Rich Moy on Jun 5, 2018 1:00:00 PM

With such a small percentage of developers actively looking for new jobs, it’s tempting for talent acquisition managers to ignore their cost-per-hire metric. Since developers are essential to every organization’s success, many leaders would argue that you could justify all of your tech recruiting expenses by making just one hire—even if you go over budget.

With all of that said, is average cost-per-hire still a relevant developer hiring metric? The short answer is yes. But why? Let’s take a closer look at why you should track your overall costs to hire a programmer, and how it can affect your entire developer hiring strategy.

It Helps You Understand the Cost of a Bad Technical Hire

Recently, there’s been a lot of discussion around quality-of-hire being more helpful than cost-per-hire for talent acquisition leaders. Best-selling author Lou Adler says, “Hiring for quality is fundamentally different than just filling positions. To do it right, you have to track performance metrics like quality of hire and return on investment.”

This is a fair argument, but let’s focus on your return on investment. While you should know what it costs to make a strong technical hire, it’s even more critical to understand the financial ramifications of a bad one.

Back in 2015, we discussed the startling cost of losing a developer. Many of the associated expenses were related to lost productivity and replacing that person. From a general standpoint, it’s not difficult to comprehend the costs of a bad technical hire without a cost-per-hire statistic. But knowing your average cost-per-hire gives you the context you need to optimize your tech recruiting strategy before you ultimately hire someone who isn’t a strong fit for a critical job.

You Need to Be Able to Justify Your Tech Recruitment Spend

Raise your hand if your recruitment team needs additional resources to hit their goals. You’re probably not alone. But before the executives at your company approve increases to your tech recruitment budget, they’ll ask you for historical data. What has it cost you to hire developers over the last 12 months? How many candidates do you typically have in the pipeline for technical roles? If you’re unable to bring numbers like these to the conversation, you’ll probably be sent back to the drawing board.

But let’s say that you’ve tracked your average cost-per-hire and that your expenses are typically around $13,000 per programmer. Now, imagine that you want to relaunch your developer hiring strategy on a new platform, where you feel confident that you can cut those costs in half. You won’t need to write a very long business case to justify that expense to your fellow managers.

Applying your cost-of-hire metric can make it much easier to get the tools that your team needs to be successful. For you as a manager, it will also set you apart as a technical talent acquisition expert. Tracking and monitoring your cost-per-hire (and other recruiting metrics) will show everyone across your organization that you are a strategic and detail-oriented leader.

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