Cost per Hire
Average total cost incurred to fill one vacancy, including advertising, agency fees, and recruiter time
What is Cost per Hire?
Cost per hire is the average total cost of recruiting one new employee. It shows how much the organisation spends to fill a role.
Understanding it helps plan recruitment budgets and decide where to invest to attract people more efficiently.
How this KPI is measured
- Function
- Human Resources
- Sub-function
- Talent Acquisition
- Industry
- All Industries
- Type
- Lagging
- Impact
- Financial control
- Unit
- $
- Measurement frequency
- Monthly / Quarterly
- Formula
- Total recruitment costs in period / Number of hires in period
How to calculate it
Divide total recruitment costs in the period by the number of hires in that period.
For example, if recruitment costs were 400,000 and there were 100 hires, the cost per hire is 4,000.
Include advertising, agency fees, recruiter time, referral bonuses and tools, and decide consistently what to include. Split by role level, since senior hires cost more.
Where it is used
Budgeting recruitment
Plan hiring cost.
Comparing channels
Find efficient sources.
Making the case for investment
Justify better tools.
How to improve it
Tips and common mistakes
- The cheapest hire is not always the best. Consider quality.
- Include the cost of vacancy where possible.
- Use the same definition each time.
More Human Resources kpi library
Build better plans, faster
Join the waitlist for early access to curated insights, flexible templates, and rapid iteration across strategy, planning, and project management.