How to Calculate Cost Per Hire
What is Cost Per Hire?
Calculates the total cost to recruit and onboard a new employee including recruitment fees, training, and opportunity costs.
Step-by-Step Guide
- 1Sum recruitment costs (job boards, recruiter fees, advertising)
- 2Add onboarding and training expenses
- 3Include opportunity cost of unfilled position
- 4Divide by number of hires in period
Worked Examples
Input
$50k, 25 hires
Result
$2000/hire
Common Mistakes to Avoid
- ✕Only including recruiter fees, forgetting training and ramp costs
- ✕Not accounting for time spent by hiring managers
Frequently Asked Questions
What's the average cost per hire?
Small businesses $5,000-8,000; large companies $10,000-20,000+ depending on role level.
How can I reduce cost per hire?
Use free job boards, improve recruiting efficiency, build employee referral programs, and streamline onboarding.
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