How to use the Cost per Hire Calculator
Add up internal costs (recruiter and hiring manager time, referral bonuses, recruiting software) and external costs (job boards, agency fees, background checks, candidate travel) for a period, then enter the hires made in it.
Internal recruiting costs
Recruiter salaries and the share of their time spent on these roles, hiring manager interview time, referral bonuses, recruiting software and employer branding work.
External recruiting costs
Job board and advertising fees, agency fees, assessments and background checks, candidate travel, relocation and recruitment events.
Using the result
Track cost per hire by role type and source. Agency hires usually cost several times more than referrals; knowing the gap helps you decide where to invest in sourcing.
The formula
Cost per hire = (internal recruiting costs + external recruiting costs) ÷ total hires.
Examples
- With the default values
Cost per hire: 5,000 Total recruiting cost: 30,000 External share: 40%
- With internal recruiting costs set to 36000
Cost per hire: 8,000 Total recruiting cost: 48,000 External share: 25%
Limitations and assumptions
Count costs and hires over the same period. Senior and hard-to-fill roles cost far more, so calculate them separately for planning.
Frequently asked questions
What is the cost per hire formula?
Cost per hire = (internal recruiting costs + external recruiting costs) ÷ total number of hires in the same period.
What is the average cost per hire?
Published averages are commonly in the low thousands of US dollars per hire, with executive and specialist roles costing many times more. Your own trend is the most useful benchmark.
Should salary be included?
No. The new employee’s salary is not a recruiting cost. Include recruiter and interviewer time spent on hiring.