Cost per hire
Also known as: cost per hire(cph)
Cost per hire represents the average cost incurred by an organization to recruit and hire one new employee. It is a commonly used KPI when setting 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:
- Costs for marketing, such as posting on job sites, 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 this requires a recruitment budget of €75,000. Conversely, the costs incurred in different years can be compared against the actual cost per hire.
