Teams & projects
Cost per hire calculator
Enter your external and internal recruiting costs and the number of hires to get cost per hire, with the total spend and time-to-fill alongside.
External costs are agency fees, job ads and assessments; internal costs are recruiter salaries, referral bonuses and your team's time. Count them once each.
How cost per hire is calculated
The SHRM/ANSI standard defines it as all recruiting costs divided by the number of hires: cost per hire = (external costs + internal costs) ÷ number of hires. External costs are the money paid outside the business — agency and job-board fees, advertising, background checks, assessment tools. Internal costs are what the business spends on itself — recruiter and hiring-manager time, referral bonuses, and relocation or onboarding handled in-house.
Spend $18,000 externally and $12,000 internally over a period in which you make 10 hires, and the total is 18,000 + 12,000 = $30,000. Cost per hire is 30,000 ÷ 10 = $3,000. Measure the costs and the hires over the same window so the two line up; a quarter's spend divided by a year's hires would understate the true figure badly.
| Total recruiting spend | Hires | Cost per hire |
|---|---|---|
| $15,000 | 5 | $3,000 |
| $30,000 | 10 | $3,000 |
| $50,000 | 8 | $6,250 |
Using the figure well
Cost per hire is a budgeting and efficiency gauge, not a verdict on quality — the cheapest hire is worthless if it does not last, so read it next to retention and time to fill rather than on its own. The widely cited benchmark from SHRM's Human Capital Benchmarking is roughly $4,700 on average, but the spread is huge: a high-volume warehouse role can cost a few hundred dollars while a senior engineer or executive runs into five figures, so compare like roles. Two levers move the number most: agency fees, which is why building a referral and direct-sourcing pipeline pays off, and time to fill, since a role left open longer burns more recruiter hours and lost productivity. Be consistent about what you count from one period to the next — quietly dropping internal time, the hardest cost to see, makes the figure look better without anything actually improving.
Frequently asked questions
What is the formula for cost per hire?
Add all external recruiting costs to all internal recruiting costs, then divide by the number of hires in the same period. The SHRM/ANSI standard uses exactly this definition.
What counts as an internal recruiting cost?
The money the business spends on itself: recruiter and hiring-manager salaries for time on the role, referral bonuses, and in-house onboarding or relocation. These are easy to overlook but often the largest share.
What is the average cost per hire?
SHRM's benchmarking has put it at roughly $4,700 on average in the US, but it varies enormously by role — from a few hundred dollars for high-volume jobs to five figures for senior and specialist hires.