How to calculate the ROI of an ATS: A step-by-step guide

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Don’t be discouraged! We’ve got four simple calculations to help you break down the ROI of an ATS and build a rock-solid business case.

1. Avoid bad hires

A bad hire is shorthand for a new employee who leaves the business within 12 months of their hire date. The US Department of Labor estimates that the individual cost of a bad hiring decision is roughly equivalent to 30% of that new hire’s first year salary.

Bad hires can be especially costly. For one, a longer time to ramp can result in delays in other areas of the business, such as a product launch. Even after all that time and training, a bad hire may never ultimately realize their revenue-producing potential at your organization.

In short, you have no choice but to cut your losses and start over with a new hire.

So, how can you quantify the cost of all bad hires to your business? First, you need to estimate a few numbers:

Estimated number of hires in the next 12 months Average % of new hires that leave w/in 12 months Average employee salary

Once you have those numbers, it’s time to start calculating. Follow this formula:

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