Cost per Hire

Cost per Hire is the total amount a company spends—both internally and externally—to attract, evaluate, and hire one new employee.

Formula

Cost per Hire = (Internal Costs + External Costs) / Total Number of Hires During the Period

How to Calculate

• External costs: job board fees, advertising, ATS/CRM subscriptions, external recruiting agencies, events, and employer branding activities.
• Internal costs: recruiter/sourcer salaries, employee referral bonuses, and the time hiring managers spend on interviews.
• Add up all recruitment-related costs for the selected period (for example, a quarter) and divide the total by the number of people who started during that same period.

Typical Benchmarks

• High-volume / frontline hiring: $100–$500.
• Mid-level / senior roles (IT, marketing, sales): $1,500–$4,000.
• Top executive roles: $5,000–$15,000+.

How to Improve

• Increase your use of free or low-cost channels, such as organic sourcing, LinkedIn, and employee referrals.
• Use conversion data to identify and stop spending on paid job boards that consistently underperform.
• Reduce reliance on external recruiting agencies by strengthening your in-house recruitment team.

© PersiaHR
When republishing these materials, a link to the PersiaHR website is required.