Cost Per Hire Calculator


About Cost Per Hire Calculator (Formula)

A Cost Per Hire Calculator is a tool used by HR professionals and recruiters to calculate the average cost incurred by a company to hire a new employee. This metric provides insights into the financial investment required for the entire hiring process, including advertising, recruitment efforts, interviews, and administrative tasks.

The formula for calculating the cost per hire is:

Cost Per Hire = (External Costs + Internal Costs) / Total Number of Hires


  • Cost Per Hire is the average cost incurred to hire a new employee.
  • External Costs are expenses related to job advertisements, recruitment agencies, background checks, etc.
  • Internal Costs are expenses related to HR personnel time, interview expenses, administrative tasks, etc.
  • Total Number of Hires is the total number of employees hired within a specific time frame.

To use the Cost Per Hire Calculator formula, follow these steps:

  1. Determine the total external costs associated with the hiring process, including expenses like job postings and recruitment agencies.
  2. Calculate the total internal costs, which include the time and resources spent by HR personnel, interview expenses, and other related costs.
  3. Count the total number of employees hired during the designated time period.
  4. Plug the values of external costs, internal costs, and total number of hires into the formula: Cost Per Hire = (External Costs + Internal Costs) / Total Number of Hires.
  5. Calculate the cost per hire. The result represents the average financial investment required to bring a new employee on board.

The cost per hire metric helps organizations evaluate their recruitment strategies and efficiency. Lowering the cost per hire without compromising the quality of candidates can contribute to overall cost savings for the company.

It’s important to note that the cost per hire can vary significantly depending on factors such as the industry, location, job level, and company size.

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