Cost-Per-Hire Definition

Cost per hire refers to the total amount of money it costs an organization to fill a vacant position within their company. This metric typically includes expenses related to sourcing, recruiting, interviewing, hiring, and onboarding a new employee.

Cost-Per-Hire Best Practices:

1. Utilize multiple sourcing channels such as job boards, social media, and employee referrals to attract a diverse pool of candidates.
2. Streamline the hiring process by using applicant tracking systems and other recruitment tools to efficiently track candidates and manage the hiring process.
3. Assess the effectiveness of different recruitment strategies to optimize cost per hire and identify areas for improvement.

How Does Cost Per Hire Work:

To calculate cost per hire, HR professionals can add up all expenses associated with hiring a new employee, such as job advertising costs, recruitment agency fees, internal HR staff salaries, travel expenses for interviews, and training costs. This total cost can then be divided by the number of hires made during a specific period to determine the average cost per hire.

Cost-Per-Hire Key Features:

– Cost per hire can vary depending on the level of the position being filled, with executive roles typically requiring higher recruitment costs.
– Tracking cost per hire over time can help organizations identify trends and make data-driven decisions to improve their hiring processes.
– Lowering cost per hire can result in operational cost savings and increased efficiency in the recruitment process.


Tracking cost per hire allows organizations to understand how much they are spending on recruitment and identify opportunities to reduce costs and improve efficiency in the hiring process.

Organizations can lower their cost per hire by implementing efficient recruitment strategies, utilizing technology to streamline the hiring process, and consistently evaluating and optimizing their recruitment efforts.

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