How is Sourcing Channel Cost measured?

Sourcing Channel Cost is a critical metric that helps organizations evaluate the effectiveness and efficiency of their recruitment channels. The correct approach to measuring this cost involves assessing the direct financial investment made in advertising and recruiting efforts relative to the success it brings in terms of applicants.

By calculating ad spend divided by the number of successful applicants, organizations can determine how much they are investing in recruiting for each successful hire gained from that specific channel. This ratio allows HR professionals to identify which sourcing methods yield the best return on investment, enabling better allocation of resources towards the most effective channels.

Other methods of measuring sourcing channel costs, such as overall recruitment budget divided by total job openings or average salary of hires divided by recruitment expenses, focus on broader aspects of recruitment spending and do not specifically isolate the cost effectiveness of individual sourcing channels. Such approaches may provide insights into overall budget management or recruitment efficiency but do not drill down to the specific costs associated with the number of successful hires from each sourcing strategy. Additionally, measuring total interviews conducted divided by recruitment costs does not directly link the effectiveness of sourcing channels to actual hires, making it less relevant for assessing sourcing channel costs specifically.