Working out what a trades hire really costs

Step 1: put a number on the empty seat

The direct answer: estimate the monthly gross margin you lose because a role is unfilled. That figure is your ceiling for sensible recruiting spend.

A simple way to estimate it:

1. Work you're declining or delaying, per month, because you don't have the people. Use your quote log or dispatch records.
2. Your gross margin on that kind of work, as a percentage.
3. Multiply the two.

Example: you're turning away about $20,000 a month of work one more crew member would make possible, at a 35% gross margin. The empty seat costs about $7,000 a month in margin.

Don't forget the knock-on effects, which are harder to price but real:

• overtime and fatigue for the rest of the crew;
• customers who go elsewhere and don't come back;
• in BC's compulsory trades, apprentices you can't take on because you're short a supervising journeyperson (our Skilled Trades Certification guide explains the two-to-one ratio).

Step 2: map your funnel

A trades hiring funnel has six stages. Count each one for every role, every month.

Then the costs: total recruiting spend for the month, including ad spend, job-board fees and any marketing fees, divided by the count at each stage.

Step 3: a worked example

A Fraser Valley roofing company is hiring two journeypersons and one apprentice over a quarter. Over three months:

• Spend: $4,000 a month in ads and boards, plus a $1,999 marketing plan, about $18,000 in total.
• Applicants: 90.
• Qualified applicants: 30.
• Interviews: 15.
• Hires: 3.
• Retained at 90 days: 3.

The costs work out as:

If each empty seat was costing about $7,000 a month in margin, a $6,000 cost per retained hire paid for itself within the first month of each person working. That's a sound result.

Step 4: see what response speed does

The direct answer: response speed often moves the funnel more than extra ad spend does, because qualified candidates who wait for days usually accept another offer.

Run the same example again, but suppose the office took three or four days to reply, and half the qualified applicants had taken other jobs by then:

• Qualified applicants who are still available: 15 instead of 30.
• Interviews: 8 instead of 15.
• Hires: 1 or 2 instead of 3.

With 2 hires, the cost per retained hire rises to $9,000. With 1, it's $18,000, and the remaining seats stay empty, still costing margin every month. Nothing about the ads changed. The leak was in the office.

That's why many of our engagements start with applicant response and tracking: same-day replies, a business text line, and a named person on every first message.

Step 5: compare channels, then move money

Once every applicant is tagged by source, split the funnel by channel. A simple table each month is enough:

Rules of thumb for acting on it:

• Give a channel six to eight weeks before judging it, unless it produces nothing at all.
• Judge on qualified applicants and hires, never on clicks.
• Shift budget monthly towards channels with the lowest cost per qualified applicant.
• Keep a small baseline running in your best channel even after you've filled the seat, so the next vacancy doesn't start from zero.

Common mistakes in the numbers

1. Counting only ad spend. Include board fees, marketing fees and the time your office spends.
2. Ignoring retention. A hire who leaves in week six is a cost, not a success.
3. Mixing roles. Apprentice and journeyperson funnels behave differently; track them separately.
4. Not asking candidates where they heard about you. Tracking links miss word of mouth.
5. Comparing against other companies' numbers. Compare against your own empty-seat cost instead.

Step 6: decide what "good" looks like for you

There is no universal benchmark worth trusting, so set your own targets from your own numbers. A practical approach:

• Take your empty-seat cost from Step 1 and decide how many months of it you'd be willing to spend to fill the role. Many owners choose one to two months.
• Divide that by the number of hires you need. That's your target cost per retained hire.
• Work backwards with your own conversion rates to find the cost per qualified applicant you can afford.

If your current numbers beat the target, keep going and protect what's working. If they miss it badly after six to eight weeks, change the message, the channel or the follow-up before adding budget. Spending more on a leaking funnel only makes the leak more expensive.

Putting it to work

Set up the tracking sheet this week, even before you change anything else; one month of honest baseline numbers will tell you where to start. Pair it with a clear employer brand so the applicants you pay for are the right ones, and see the pricing page to compare plan costs against your empty-seat figure. If you'd like us to build the sheet and read it with you monthly, the contact page explains how to reach us.