Cost Per Hire Calculator
What a Hire Actually Costs, Beyond the Salary Offer
The accepted salary is only one line item in what it costs to fill a role. Job board postings, agency fees, applicant tracking software, referral bonuses, background checks, and the recruiting team's own time all belong in the real cost of a hire — and separating internal spend from external spend is exactly how HR and finance teams reconcile that figure.
The Formula
Cost Per Hire = (Internal Recruiting Costs + External Recruiting Costs) / Number of Hires
Internal costs typically include recruiter salaries and internal tools; external costs cover agency fees, job board spend, and advertising. Both are summed and divided across the total hires they produced.
Where This Is Useful
- Budgeting a hiring plan — multiply cost per hire by planned headcount growth to forecast the recruiting budget needed.
- Comparing sourcing strategies — a lower cost per hire from one quarter to the next signals a sourcing mix that's working; a rising figure is worth investigating.
- Benchmarking against industry averages — cost per hire is one of the most commonly tracked recruiting metrics for external benchmarking.
Worked Example
| Internal costs | External costs | Number of hires | Cost per hire |
|---|---|---|---|
| $15,000.00 | $8,000.00 | 5 | $4,600.00 |
How to Use This Calculator
- Enter Internal Recruiting Costs — recruiter time, internal tools, and other in-house spend.
- Enter External Recruiting Costs — agency fees, job board postings, and advertising.
- Enter the Number of Hires those costs produced.
- Select Calculate to get the cost per hire.
Related Calculations
See whether that spend is paying off with the Recruitment ROI Calculator, or break cost down by individual sourcing channel with the Sourcing Channel Effectiveness Calculator.