Cost Per Hire Calculator

Let's break it down:

External recruitment costs: These are expenses involved in hiring from outside sources (outside the organization). Examples include fees paid to recruitment agencies, job advertising costs, recruitment technology expenses, candidate travel and relocation costs, and pre-employment screening expenses.

Internal recruitment costs: These are expenses involved in hiring from within the organization. Examples include salaries of HR professionals or internal recruiting staff, costs of operating internal job boards, employee referral bonuses, interview-related expenses, and recruiter travel costs.

Total number of employees hired: This refers to the total number of individuals recruited and onboarded during a given period, regardless of whether they remain with the company afterward.

A cost-per-hire (CPH) calculator is a strategic tool that improve hiring efficiency and supports data-driven decision-making in HR practices.

It helps you understand the ROI of your hiring efforts. You can identify inefficiencies, reduce spend, and benchmark against industry standards.

These are the main benefits:

• Better tracking: It helps organizations capture all recruitment-related expenses, including hidden or indirect costs, providing greater transparency for budgeting and resource planning.
• Benchmarking: Calculating CPH enables companies to compare their hiring costs against industry benchmarks or competitors, helping assess the effectiveness of their recruitment processes.
• Continuous improvement: Regularly measuring CPH allows HR teams to evaluate different hiring strategies and optimize them over time.
• Budget planning: Understanding the average cost per hire helps forecast total recruitment expenses, making workforce and financial planning more accurate.
• Identifying areas for improvement: Analyzing CPH can reveal cost-intensive stages of the hiring process, enabling organizations to streamline operations and reduce unnecessary spending.

Your company hired 25 new employees in Q1. During this period, you spent $75,000 on internal recruiting, $50,000 on external recruiting, and $15,000 on relocation and miscellaneous expenses.

To calculate the cost per hire (CPH):

When planning a recruiting budget, it's important to review all the costs your organization typically incurs during the hiring process. Creating a detailed and comprehensive list of potential recruiting expenses helps ensure accurate budgeting and better cost control. Common elements to include in a recruiting budget are:

• Job board fees: Costs paid to job boards or online platforms to post and promote job openings.
• Candidate assessment costs: Fees for pre-employment testing services, such as skills assessments, psychometric tests, or coding challenges.
• External recruiter expenses: Payments made to individual recruiters, recruitment agencies, or staffing firms for sourcing and placing candidates.
• Employer branding efforts: Expenses related to recruitment-focused events and initiatives, such as career fairs, campus recruiting events, and employer branding campaigns.
• Careers page costs: Costs associated with creating, maintaining, updating, and redesigning the company's careers page on its website.
• Internal recruiters costs: Often the largest portion of the recruiting budget, including recruiters' salaries, benefits, training, and travel expenses.