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Cost Per Hire


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Cost Per Hire
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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. 





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


Related Terms

Cost to Fill

is a term used interchangeably with cost to hire. However, in some cases, cost to fill refers to the beginning of the hiring process when a position becomes vacant.

Quality of Hire

measures the value an employee adds to a company and the impact the employee may have on the organization’s long-term success.

Time to Hire

refers to the amount of time that passes between a company’s initial contact with a candidate and the candidate’s acceptance of an employment offer.

Time to Fill

is a term that is frequently confused with time to hire, but these two metrics measure different things. Time to fill refers to the entire recruitment process, from the time the position is vacant, through job opening creation via HR, to hiring a qualified candidate. Time to hire refers to how many days it takes to hire someone once a qualified candidate is sourced and contacted. While time to fill is a long process, time to hire is typically measured in days rather than in weeks or months.
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