IBN: Defining Excellence in Electronic Recruiting


Electronic Recruiting

Our Rate Card



Please Click On Our Sponsors

Please Click On Our Sponsors

Recruiting News for the Human Resource Professional

Please Click On Our Sponsors

Please Click On Our Sponsors

Please Click On Our Sponsors

Please Click On Our Sponsors




Click On Our Sponsors

Click On Our Sponsors







Find out more
About IBN

Got a news tip?
Tell us at

Our Rate Card



Trends Reports



It is better
to not be on
the web than
to be on and
not know why

John Sumser

is more
it seems.
John Gall


The Electronic Recruiting News is a Free Daily Newsletter For Recruiters, HR Managers, Advertising Agencies and Clasified Advertising Operations

Home | ERN | Bugler | The Blogs | Blogroll | Advertise | Archives | Careers
Resumes/Opportunity Cost (Tactical Importance)
(November 29, 2004)

Opportunity Cost (Tactical Importance)
Opportunity cost is a measure of the risk of not having something. Subject to extreme variation, one way to think about opportunity cost is that, as a minimum, an alternative source must be developed. Described in maximum terms, opportunity cost includes all of the profit foregone by not having something.

Resumes can be argued to have extremely high opportunity costs. To the extent that the best-qualified available candidate for a particular job is not placed in the job, overall quality of the job suffers. To the extent that positions go unfilled in a project (or company) both quality and profitability are compromised. In some cases, unfilled positions may result in additional penalties or the actual demise of the business.

At a bare minimum, empty desks in an enterprise result in overtime premiums being paid to existing employees.

Since extended delays in hiring adequate numbers of workers will inevitably result in large morale problems and higher attrition rates, we assume that no enterprise can survive the consequences of delaying the hiring process by more than 90 days. We therefore add an opportunity cost to each Resume of 12.5% to its base value.

The factor is arrived at in the following way. If a job goes unfilled for 90 days, it will cost a premium of 50% to have that work accomplished. One quarter of that increase will be consumed during a 90-day period. One quarter of 50% is 12.5%.

This is an extremely conservative valuation, which does not take account of other financial and morale implications of hiring delays. With opportunity cost factored in, the value of a Resume is increased by 12.5% in each block of the matrix. This figure could easily be doubled to 25% to account for the other tactical variables.

Access To The Resume
Access to the Resumes from certain subsets of the general employee population is restricted for a variety of reasons. Typically, it is easier to acquire the Resumes of people who are currently unemployed than it is to acquire those belonging to people who are highly motivated in challenging, well-compensated positions.

Like our mining analogy in previous paragraphs, it is less expensive to mine for candidates when the Resumes are on the equivalent of public property. When a third party owns the 'land', fees (license fees in the case of Resume databases) are paid. Often (in mining, real estate and other property transactions) a third party holds an option to the lease and is paid on the basis of market value for access to the 'minerals'.

There are many online databases of Resumes with restricted access. Members of the HR community cannot, under any circumstances, acquire direct access to the databases. Should they desire access to the information contained in those databases, they are subject to market pricing (what the market will bear). While no factor has been added to our Resume value for access rights, it is well worth noting that major database access can have fee structures in excess of $50K per year.

- John Sumser © TwoColorHat. All Rights Reserved.

Home | ERN | Bugler | The Blogs | Blogroll | Advertise | Archives | Careers

Contacting Us:
Call, fax, write, email. We'd love to consult with you about your project.

Copyright © 2013 interbiznet. All rights reserved.
Materials written by John Sumser © TwoColorHat. All Rights Reserved.
Mill Valley, CA 94941

Electronic Recruiting News



         - Bugler
           Daily Industry News

         - ERNIE
           ERN in Email


  • BlogRoll
  • Integrated Employment
          Branding Presentation
  • Trends Whitepaper
  • interbiznet Listings
  • interbiznet Trends
  • interbiznet Bookclub
  • Top 100 E-Recruiters
  • Presentations
         - Recruiting Then/Now
  • Recruiter's Toolkit
  • Seminar In A Box
  • ERN Archives
  • 1st Steps In The Hunt


  • Our Rate Card
  • Demographics


  • BlogRoll


  • Happy Thanksgiving
  • Strategic Importance
  • Resume Values Vary II
  • Resume Values Vary
  • Meaning of A Resume
  • Price of A Resume
  • Winter Articles
  • Tough Job
  • Community II
  • Community
  • Social Contract
  • Service
  • Agony and the Ecstasy
  • Job Ad Architecture V
  • Different Audiences
  • Job Ad Architecture
  • Everyone Is A Customer
  • Different Audiences
  • Thinking In '98
  • Relationships
  • Diversity
  • Recruiting Is Advertising
  • Assessment
  • Copyright
  • Life Cycle Costs
  • Venture Capital
  • Attraction
  • The Online Ad
  • Market Segmentation
  • Client Stages


    Stocks We Watch:
    Public Companies
    in Electronic Recruiting


         © 2013 interbiznet.
         All Rights Reserved.

         Materials written
         by John Sumser
         © TwoColorHat.
         All Rights Reserved.