Close this search box.

What Really Affects Your Cost-Per-Hire?

Listen to the article:

When you are trying to increase the efficiency of your recruiting strategy, it makes sense to get as much out of your recruiting budget as possible. So one of every fleet’s main goals is to hire as many drivers as possible at minimal cost. This makes the metric of cost-per-hire highly important.
How much are you paying to get a driver in a seat? If the less you pay means you can hire more drivers, then it makes sense to work on lowering your cost per hire. Where fleets run into an issue is in understanding what parts of their recruiting campaigns have an effect on cost-per-hire.
There’s a common assumption that if you increase or decrease certain metrics (e.g. click through rate, cost-per-lead, conversation rate, etc.), it reduces the cost of hiring a driver. But is there any truth behind that assumption? The answer to that question will reveal where you need to focus your efforts when trying to reduce cost-per-hire.
To make the process a little easier for you, we at Randall-Reilly took an extensive look at our clients’ campaigns to see if there really is any relation between common recruiting metrics. This includes cost-per-hire. We used the concept of correlation to compare metrics. If you’re anything like me, you probably need a definition of correlation, or at least a refresher on how it works. So let’s take a brief look at the concept so we can understand how the different recruiting metrics relate to each other.
[hr style=”3″ margin=”40px 0px 40px 0px”]

The Concept of Correlation

In statistics, correlation shows how strongly two or more variables relate. For instance, how hot or cold it is outside can affect the sales of certain food products. A hot temperature can result in increased ice cream sales, while a cold temperature can result in increased hot cocoa sales.
Ice Cream and Cocoa Comparison Chart
The temperature and ice cream sales rise together. So that would be identified as a positive correlation. But though the temperature effects hot cocoa sales, both move in opposite directions. So there’s a negative correlation between the two.
Positive-Negative Correlation Chart

Things to Remember

  • The range of measurement for correlation is 0 to 1 – e.g. .02, .85, .51, etc.
  • Negative correlation is indicated using a minus sign – e.g. -.85
  • If a correlation doesn’t have a minus sign, it is a positive correlation – e.g. .02

Hopefully, this dive into correlation was in-depth enough for those who are unfamiliar with the concept; and brief enough for those who simply needed a refresher of how it works.
[hr style=”3″ margin=”40px 0px 40px 0px”]

Correlation Between Recruiting Metrics

Using correlation, we identified the strength of the relationships between different recruiting campaign metrics. This is what we derived:
Correlation Between Driver Recruiting Metrics Chart
CPM – Cost per impression, CPC – Cost per click, CTR – Click through rate, CR – Conversion rate, CPL – Cost per lead, CPH – Cost per hire, L:H – Lead to hire ratio.
Notice the numbers in green. Those are the highest, thereby, the strongest correlations. For example, click-through-rate (CTR) has a positive correlation of .86 with cost per 1,000 impressions (CPM). So as your CTR rises, so does your CPM. We see the same thing with conversion rate (CR) and cost per click (CPC) which have a positive correlation of .98.
Each empty cell indicates that there is no correlation. The most surprising empty cell may be the Cost-per-lead/Cost-per-hire cell. A common assumption we hear often from fleets is that a low cost per lead equals a low cost-per-hire, but that isn’t the case. Driving down your cost-per -ead by changing channels or buying cheaper leads may increase lead volume, but you risk lowering your lead quality.
The specific type of leads you’re looking for may not be as inexpensive as you wish. On the other hand, how expensive a lead is doesn’t determine its quality. So either way, the cost of a lead, whether high or low, doesn’t guarantee that the lead becomes a hire. So we found no correlation between cost-per-lead and cost-per-hire.
[hr style=”3″ margin=”40px 0px 40px 0px”]

The Correlation that Matters

If you take a close look at the grayed out areas in the correlation chart above, you’ll see the correlations between common metrics and cost-per-hire. You’ll notice that each of those correlations is low, except for the very last one, the correlation between cost-per-hire and lead-to-hire ratio (i.e. how many leads amount to 1 hire).
We’ve seen that the more leads it takes to amount to a hire, the more it costs to hire a driver. This reveals that lead-to-hire ratio is the metric to concentrate on if you want to lower your cost-per-hire. So how do you cut down on the number of leads it takes to get 1 hire?
If you’re getting so few drivers out of a large quantity of leads, then this speaks to two things: the quality of your leads and your recruiters’ ability to close good leads.

[visibility show=”desktop”]



Do you need to shorten response time and increase lead closes?

LeadConnect can help.


[visibility show=”tablet”]

Do you need to shorten response time and increase lead closes?

LeadConnect can help.

[visibility show=”mobile-landscape”]

Do you need to shorten response time and increase lead closes?

LeadConnect can help.

[visibility show=”mobile-portrait”]

Do you need to shorten response time and increase lead closes?

LeadConnect can help.


Lead Quality

A quality of a lead is determined by how hireable that lead is. Does the lead meet your hiring criteria? There are a number of reasons that could prevent the lead from doing so. They may be out of the area where you’re hiring. They may lack the qualifications/requirements needed. They may not be the right driver type.
Being as specific as possible in your ad messaging, list of qualifications, and most especially, your targeting can increase the quality of the leads you generate. And generating qualified leads raises your chances of turning more leads into drivers, thereby reducing your lead-to-hire ratio.

Recruiter Ability

If you’re producing qualified leads, the disconnect could be with your recruiters. There are a few factors that could affect a recruiter’s ability to close leads. Here are three of the most common ones:

Poor Phone Etiquette:

This is a driver’s first human interaction with your fleet. If your recruiters are failing to make drivers feel like more than just a number, then you can lose good leads at this point of your recruiting process. Screening recruiter calls can help you gather best practices and areas of improvement.

Failure to Incorporate Automation:

Your recruiters, no matter how great at what they do, can only do so much. Some inbound calls that come in after hours will go unanswered. Some will go to a recruiter’s voicemail. These things are unavoidable, but you’re not powerless against them. Incorporating autoresponders can help you tackle these issues i.e. text messaging, emails, etc. Having these tools to respond to a driver at times when your recruiters are unavailable can keep the conversation going between your fleet and leads.

Recruiter Workload:

Overwhelming your recruiters with too many leads prevents them from appropriately following up with each. There’s so much that goes into following-up with one good lead. There’s the first phone conversation, multiple follow-ups, the application process, screening, etc. Juggling too many leads increases the chances of overlooking important details. This results in lost leads. Throwing away good leads like this means you’re producing less hires than you should be.


To determine how many leads are just enough for a recruiter, a good metric to use is total inbound response per month per recruiter. We’ve seen that the limit for recruiters—before they start becoming counterproductive—is around 400-500 leads per recruiter per month.
The relationship between common recruiting metrics and cost-per-hire may not be as strong as you think. You may have been cutting down your cost-per-click or cost-per-lead with the expectation that they would lower your cost-per-hire, when in actuality, they have little to no effect on it whatsoever. Focus on raising the quality of your leads and your efficiency in closing good leads and you will see the cost of hiring a driver go down.