Understanding a critical hiring metric- Cost-per-Hire

What is Cost-per-Hire?

‘Cost per hire’ is the total cost incurred in recruiting one employee into the company



Cost-per-Hire = <Internal Recruiting Costs> + <External Recruiting Costs>/<Total no. of hires>


#1 Tangible Internal Costs

Costs of Infrastructure, administrative costs, recruiter salaries & employee referral bonuses


#2 Tangible External Costs

Costs of candidate sourcing, recruiting consultant fees, assessment tools, marketing, advertising costs, career fairs, background checks, technology costs (recruitment software) & signing bonuses


#3 Intangible & Indirect Costs

Costs related to interviewing (no. of hours invested in interviewing), coordination costs, onboarding costs, travel costs etc.


To understand the Time-to-Hire metric and how to leverage it to hire exceptional talent, read