The best way to view the ROI of a hiring software like Spark Hire is through the financial impact on the organization. Let’s walk through how to do that.
A common metric used to measure employee productivity is revenue per employee. While it’s not the end-all-be-all, this data helps organizational leaders place a financial value on headcount.
According to CFO.com and the American Productivity and Quality Center (APQC), employees performing in the 25th and 50th percentiles generate $176,471.00 and $310,000.00 in revenue-per-employee respectively.
For the sake of this analysis, let’s skew towards lower performers and use the average between the 25th and 50th percentiles which is $243,235.50 in revenue-per-employee.
Understanding that all organizations and positions are different, let’s use this “revenue-per-employee” ($243,235.50) as a proxy for the value of a typical employee.
Now, as it relates to the use of Spark Hire’s solutions, most organizations see the biggest impact in their time-to-hire and their quality of hire.
How Spark Hire Impacts Time-to-Hire
Time-to-hire is the universally accepted metric to measure the speed of the hiring process.
According to SHRM, the average time-to-hire is 44 days.
Improvements in your time to hire can have significant downstream implications for your organization. Each day you can shave off your time-to-hire can be tied to a financial impact.
For example, if you decrease your time-to-hire by a week, this equates to $4,677.61 per hire based on the revenue-per-employee data above.
How Spark Hire Impacts Quality of Hire
According to SHRM, the top 2 ways that organizations measure their quality of hire are performance appraisals and retention rates.
For the sake of this analysis, let’s use retention rates since this is something every organization can easily measure.
If you’re a 100 person company with 90% retention, this means you need to backfill 10 roles per year. If this retention metric improves to 93%, you need to do 3 less backfills per year.
The financial impact of backfilling someone is determined by the time when you don’t have someone in the role plus the time it takes to onboard a new hire to full productivity. Most HR sources will say the average onboarding time for a new hire is 3-6 months, but let’s assume you ramp new hires very quickly.
So, with the average time-to-hire and an aggressive onboarding timeline, a single backfill costs the organization 134 days of productivity. That’s equivalent to $95,961.40 per backfill which is still a conservative figure as many sources estimate the cost of replacing someone is at least two times their annual compensation.
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Additional Ways to Measure Impact
The results of the ROI calculator only take into account the new hires, but doesn’t factor in the additional impact of….
Improved HR and Talent Acquisition Team Productivity
Using Spark Hire to automate steps in the hiring process, reduce unnecessary interviews, and drive administrative efficiencies across the HR/talent acquisition team, frees up bandwidth to be focused on higher impact activities for the organization.
For example, if you save 40 hours throughout the year by doing one-way video interviews instead of phone screens, the reallocation of those 40 hours is where you really capture the ROI of the initial time savings.
Cutting Recruitment Costs
According to SHRM, the average recruitment cost per hire is $4,700 which includes expenses like job advertising – this can be significantly higher if you’re using recruitment agencies.
You’ll create savings in this area when reducing the number of backfills needed and speeding up the hiring process.
Consolidated HR Tech Spend
Another variable to consider, but is not factored into the Spark Hire ROI calculator is the ability to consolidate your HR tech spend with our solutions.
For example, if you’re using Spark Hire’s video interview software, but then upgrade to our applicant tracking system as a replacement to an existing ATS, not only will you save on the expense side, but you’ll also work with a single vendor instead of two.
Spark Hire customers have found they’re able to consolidate the following into the single relationship:
- Applicant Tracking System
- Automated Reference Checks
- Behavioral Assessments
- eSignature (Offers)
- Scheduling
- Video Interviews
- Zoom Licenses
- And more…
Measuring the ROI of Spark Hire goes beyond simple time savings—it highlights the strategic value of optimizing your hiring process. By reducing time-to-hire, improving quality of hire, and enabling your HR team to focus on higher-impact activities, Spark Hire equips your organization to build stronger teams and drive meaningful business outcomes.
When combined with the potential for reducing recruitment costs and consolidating HR tech spend, the financial and operational benefits become even more compelling.
As you evaluate your hiring strategy, consider how Spark Hire can help you not only meet immediate needs but also align your talent acquisition efforts with long-term organizational growth.
The numbers speak for themselves, but the true impact is felt in the people who join your team and the efficiency with which they do so.
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More than 7,000 customers worldwide have made a positive impact on their organization with Spark Hire
