Calculate your cost per hire by dividing total internal and external recruiting costs by the number of hires. Benchmark CPH and optimize budgets.
Cost per hire (CPH) is one of the most important recruitment metrics used by HR professionals and talent acquisition teams worldwide. Defined by the Society for Human Resource Management (SHRM) and the American National Standards Institute (ANSI), CPH measures the total investment required to fill a single open position. It encompasses both internal costs—such as recruiter salaries, hiring manager time, and employee referral bonuses—and external costs—such as job board fees, agency expenses, background checks, and recruiting technology.
Understanding your cost per hire allows you to benchmark against industry averages, identify inefficiencies in your recruiting funnel, and allocate budgets more strategically. According to SHRM, the average cost per hire across industries is approximately $4,700, though this figure varies significantly by role, seniority level, and geography.
This Cost Per Hire Calculator lets you input all relevant internal and external expenses alongside the total number of hires to instantly compute your CPH. Use it to compare costs across departments, evaluate the ROI of different sourcing channels, and build a business case for recruiting process improvements.
Tracking cost per hire gives your HR team a clear Having a precise figure at your fingertips empowers better planning and more confident decisions. Manual calculations are error-prone and time-consuming; this tool delivers verified results in seconds so you can focus on strategy. Comparing different scenarios quickly reveals the most cost-effective or beneficial option for your unique situation., data-driven picture of recruiting efficiency. Without this metric, organizations risk overspending on underperforming channels while underinvesting in high-quality sources. This calculator removes the guesswork by standardizing the SHRM/ANSI formula and providing immediate results you can share with leadership.
Cost Per Hire (CPH) = (Total Internal Costs + Total External Costs) ÷ Total Number of Hires
Result: $5,000 per hire
With $50,000 in internal costs and $75,000 in external costs, the total recruiting spend is $125,000. Dividing by 25 hires yields a cost per hire of $5,000. This is slightly above the SHRM average of $4,700, suggesting moderate room for optimization.
Internal recruiting costs are often overlooked because they are embedded in salaries and overhead. To calculate them accurately, estimate the percentage of time recruiters and hiring managers spend on talent acquisition activities, then apply that percentage to their total compensation. Include referral bonuses, internal mobility program costs, and any internally developed recruiting content.
Industry benchmarks vary widely. Technology and healthcare roles tend to have higher CPH due to specialized skill requirements and competitive markets. Retail and hospitality roles typically have lower CPH but higher volume. Use benchmarks as a directional guide, not an absolute target.
Once you know your CPH, you can calculate the ROI of recruiting investments. For example, if a new ATS reduces CPH by $500 and you make 200 hires per year, the annual savings of $100,000 can be compared against the software cost. This data-driven approach elevates HR's strategic influence within the organization.
Internal costs include recruiter salaries and benefits, hiring manager time spent on interviews, employee referral bonuses, internal job board maintenance, and any in-house recruiting technology costs. Essentially, any expense paid to your own organization for the purpose of filling roles.
External costs include job board postings, staffing agency fees, background and drug screening, recruiting events, career fairs, campus recruiting travel, employer branding campaigns, and any third-party technology subscriptions used for sourcing or assessment. Keeping this factor in mind will improve the accuracy and usefulness of your overall calculations.
According to SHRM, the average CPH is around $4,700. However, executive roles can exceed $14,000, while entry-level positions may cost under $2,000. Compare your CPH to industry-specific benchmarks and your own historical trends rather than a single universal number.
Most organizations calculate CPH quarterly or annually. Quarterly tracking provides more timely insights and lets you react to trends faster. Ensure you use consistent time periods and cost categorization for meaningful comparisons.
The standard SHRM/ANSI definition of CPH does not include onboarding or training costs. Those expenses are typically tracked separately as onboarding cost or new-hire training cost. However, some organizations choose to include them for a more comprehensive view.
Focus on employee referrals, optimize job board spending by tracking source-of-hire data, invest in employer branding to attract inbound candidates, automate screening with AI tools, and improve your careers page conversion rate to reduce paid advertising dependency. Following these guidelines will help ensure accurate results and better outcomes over time.
Strictly speaking, the SHRM formula includes all costs attributable to the recruiting function. Some organizations include allocated overhead (office space, utilities) while others focus only on direct costs. Choose a consistent methodology and document your inclusions.
Cost per hire measures the total spend divided by actual hires, while cost per applicant (or cost per application) divides sourcing spend by the number of applications received. CPH is a broader metric; cost per applicant helps evaluate specific sourcing channels.