Cost per hire
Also known as: cost per hire(cph)
Cost per hire represents the average cost an organization incurs to recruit and hire one new employee. It is a commonly used KPI when determining a budget for recruitment and analyzing costs incurred.
Calculate cost per hire
By dividing the total costs incurred by the number of employees hired, the cost per hire is obtained. The costs included for hiring employees include:
- Cost for marketing, such as posting on job boards, social media and placing traditional ads;
- Internal costs, such as costs for conducting interviews, the salaries and other costs of recruitment staff, and bonuses for existing staff who bring in candidates;
- External costs, such as outsourcing recruitment and hiring activities and having candidates reviewed.
It often includes costs incurred for
onboarding, the induction and arranging formalities after the employment contract is signed.
If a company needs to hire 50 employees in a year and the cost per hire is €1,500 then this requires a recruitment budget of €75,000. Conversely, the costs incurred in different years can be compared to the actual cost per hire.
