What Is Cost Per Hire?
Cost per hire (CPH) is a core recruiting metric that measures the average amount your organization spends to fill an open position. It is calculated by adding together all internal and external recruiting costs over a period and dividing by the number of people hired in that period. The metric is defined by the SHRM/ANSI standard and is widely used by HR and talent acquisition teams to benchmark recruiting efficiency and plan budgets.
How to Use This Calculator
Enter your total internal costs (recruiter salaries, referral bonuses, sourcing tools, in-house time), your total external costs (job board fees, agency commissions, advertising, background checks, travel), and the number of hires made during the same period. The calculator instantly returns your average cost per hire along with the total recruiting spend.
The Formula Explained
The equation is simple: $$\text{Cost Per Hire} = \frac{\text{Internal Costs} + \text{External Costs}}{\text{Number of Hires}}$$ Internal costs are expenses tied to your own staff and systems, while external costs are paid to outside vendors. Combining them and dividing by hires gives a single comparable figure.
Worked Example
Suppose your team spent $30,000 in internal costs and $20,000 in external costs and made 10 hires. Total cost is $50,000. Divided by 10 hires, your cost per hire is $5,000.
$$\text{Cost Per Hire} = \frac{\$30{,}000 + \$20{,}000}{10} = \frac{\$50{,}000}{10} = \$5{,}000$$
FAQ
What counts as an internal cost? Recruiter and hiring manager time, employee referral payouts, applicant tracking software, and any in-house overhead allocated to hiring.
What is a good cost per hire? It varies by industry and role seniority, but many organizations average around $4,000–$5,000 per hire. Compare against industry benchmarks rather than a fixed target.
Why track cost per hire? It helps you justify recruiting budgets, identify expensive channels, and measure the ROI of process improvements over time.
