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How To Calculate Your Cost Per Hire

Cost Per Hire

Cost Per Hire, along with Time to Hire, Attrition Rates, and an abundance of other hiring metrics are highly valued in the recruitment industry to evaluate our methods, making it clearer the areas that are not working, so we can work smarter in the future.

In particular, Cost Per Hire, a metric we’ve been using for decades, allows us to evaluate our recruitment investments. Important as recruitment can often return a hefty bill.

Knowing this figure can then provide the data for HR Professionals to set a future budget.

According to Glassdoor, an employer will spend an average of £3,000 and 27.5 days to hire.

So how do you work out your cost per hire?

First, you need to look at both your internal and external costs.


Internal may include:

  • In-house Recruitment
  • Recruitment Resources – Example, ATS
  • Internal Recruiters
  • Referral Schemes
  • On-Boarding


External may include:

  • Pre-hire Assessments
  • Sourcing Eligibility Tests – Examples, Background Checks, DBS Checks, Drug Tests
  • Recruitment Technology – Example, Multi-Poster
  • Contractors
  • Adverts – Jobs Boards
  • Marketing
  • Recruitment Events


Taking these costs into consideration, you now need to divide the amount you are spending on your recruitment (Internally & Externally), by the number of hires made in a specified period to give you your cost per hire.


                   Internal Costs & External Costs

CPH = ---------------------------------------

                Total No Hires in a Specified Period


Then consider how many hires you make in a given period or every year. Multiply this by the cost per hire, and then you will also have your ballpark figure so you can set both a budget per hire and per period as different roles may acquire different recruitment costs.


Here Are Some of Our Tips:

  • Make Use of Recruitment Technology Like an ATS To Track & Evaluate Your Data
  • Find Out the Average No of Hires the Recruiter Can Make in a Given Period
  • Set an Attrition Rate Target – This Should Aim to Be No More Than 15%
  • Multiply Your Retention Rate by Your Total No of Employees -This Gives You The No of Employees You Will Need to Stay the Same Size
  • Find Out the Average No of Applicants You Receive & the Average Time An Employees Stays Within the Company

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