Cost Per Hire

Cost Per Hire

In recruitment and hiring metrics, the cost per hire refers to the amount of money spent annually on recruitment per hire. The total internal and external recruitment costs are added together to calculate cost per hire. Then, that sum is divided by the total number of new hires in a specific time frame, resulting in the cost per hire. 

Tracking the cost-per-hire metric allows organizations and recruiters to identify areas of opportunity to improve their recruiting process. 

Cost per hire can be calculated for different categories, including by department, job position, source of hire, and leadership level. 

Example: 

Internal costs can include:

• Employee referral bonuses

• Recruiter and hiring manager salaries

• Compliance costs

• Software fees

• Training and development costs

• Time spent by recruiters and managers

• Lost productivity

• New hire onboarding expenses

Examples of external costs:

• Paid advertisements

• Recruiting events or career fair costs

• Marketing costs

• Relocation expenses

• Agency-related expenses

• Candidate expenses

• Background checks

• Travel expenses

• Sourcing expenses