Brenda Crohn, the recruiting director for a text-book publisher called Galactica, was in the middle of a heated argument with John Stubbins, the vice president of marketing. The argument revolved around where to place the ads to recruit candidates for sales positions. ''I know that the quality of the applicants generated off salescareers.com may not be as good as those from our job ads in The Journal of Academic Publishing; but we can reach a lot more candidates through the Internet job site compared to our trade journal and I really want a large pool of applicants to choose from. Even if we hire fewer of them, I think it's good to select from a bigger group," argued John.

Crohn was frustrated that the only criterion John seemed to be considering was the number of applicants the Internet job site ad would generate. ''John," Crohn interrupted, ''you are right about the number of applicants the ads will generate. Our current trade journal ads generate an average of 1.2 applicants per ad, and we could expect over twice that number from salescareers.com in fact, I've been told that a reliable estimate is 4.5 applicants per posting. But you've got to con- sider the costs as well as the number of qualified applicants. We like to hire experienced reps who understand the industry, and those who respond to the Internet ads are much less likely to have the experience we prefer."

''So what are the differences in costs?'' Stubbins asked. Crohn replied, ''Well the current trade journal ads cost $132 per posting, and salescareers.com charges $288 per ad. But as you acknowledged a minute ago, the quality of the internet applicant would be lower, and therefore we would surely make fewer successful offers than we currently do. We currently hire 50 percent of the applicants, but we estimate that we would only be able to hire 10 percent of those who applied through the Internet site.

''So what is the bottom line on all of this?'' asked Stubbins. ''The Internet ad costs us more, but we get a bigger pool of candidates. Even if we reject a higher number of them, it may actually cost Galactica less per rep hired. There is noth- ing more critical to our business than hiring good people; and given our growth rate, we will need to keep hiring steadily for the indefinite future. I think we should give the Internet a try!''

Crohn was not convinced. She told Stubbins, ''I do not have a bottom line at this point, but I will have a recommendation as soon as I crunch the numbers. I'll get back to you later today. Then we can make an informed decision about whether or not we should switch to salescareers.com.

Questions:

1. Assume the numbers in the Galactica case were different; and that the trade journal ads actually cost $167 and generated 2.1 applicants per ad and that you could hire 43% of these applicants. In this scenario, what is the cost per hire? (Round to 2 decimals)
2. Assume the numbers in the Galactica case were different; and that the sales careers ads actually cost $338 and generated 7.37 applicants per ad and that you could hire 14% of these applicants. In this scenario, what is the cost per hire? (Round to 2 decimal)