Cost per Hire

Cost per Hire is the average total expense an employer incurs to fill one open position. It aggregates direct and indirect recruiting costs so HR teams can measure recruiting efficiency and budget impact.

What is Cost per Hire

This metric includes advertising, agency or referral fees, recruiter and hiring manager time, assessment and background check costs, relocation and onboarding expenses. It gives a single per-hire figure for comparison over time or across departments.

How does it work

Calculate Cost per Hire by dividing the sum of external recruiting costs and internal recruiting costs by the number of hires in a defined period. Use consistent cost categories and timeframes for reliable comparisons.

Practical usage in HR

Organizations use Cost per Hire to set hiring budgets, evaluate sourcing channels, justify recruitment spend and support workforce planning. It also helps assess recruitment ROI and efficiency.

• Hiring manager assessing agency versus in-house recruiting costs
• Talent acquisition team tracking improvements after employer branding investments
• Finance reviewing onboarding and relocation spending per hire

Related HR concepts

Related terms include Time to Fill, Time to Hire, Quality of Hire, Recruitment ROI, Source of Hire and turnover rate. These metrics together inform recruitment strategy and compliance reporting.