Cost per Hire Calculator | Free Recruiting Cost Breakdown
Enter your job ad spend, agency fees, internal recruiter labor cost, and number of hires to instantly calculate your Cost per Hire for free. Pair it with turnover rate to see both sides of your people costs.
Working out the cost of each hire
Enter what was spent on job advertising, on agency fees and on the recruiters' own salaries, along with the number of people actually hired, and this tool works out the cost per hire.
**The first thing to establish about this measure is what went into the numerator.** Counting only what was paid to outside parties, or **including the recruiters' salaries and the hours the hiring managers gave up to interviews**, can change the figure several times over for the very same campaign. Setting your number against another company's **is no comparison at all unless you know what they counted.** **And the reason the measure must never stand alone lies in its relation to retention.** A cheap hire who leaves early means **running the same exercise again, which doubles the true cost.** Where driving the figure down becomes an end in itself, the total spend can rise instead.
How to work it out
- Enter what was paid outside the company Job advertising, agency fees and the like.
- Enter the recruiters' salaries **Whether to include this changes the figure markedly.** Settle a policy and hold to it every time.
- Enter the number actually hired **Anyone who declined an offer does not belong in the denominator.**
- Read it alongside retention **Where early departures are common, the true cost runs above the figure shown.**
Tips for getting more out of it
- When calculating Cost per Hire, include the cost of re-running a search after a declined offer or early departure — that gives you a more realistic picture of recruiting efficiency.
- Run this calculator separately for each recruiting channel (job ads, agencies, referrals) to see which channel actually delivers the best cost efficiency.
- Don't forget to include the time recruiters and hiring managers spend on screening and interviews in the internal labor cost field — leaving it out understates your real cost.
- Pairing this result with Turnover Rate lets you estimate how much extra recruiting cost a high turnover rate is actually generating for the business.
Where it comes in useful
Comparing recruitment channels
**You can set advertising against agencies on the same definition and see how far the costs differ.**
Budgeting a recruitment plan
Working back from the number of hires needed gives you the budget required.
Deciding between doing it in-house and outsourcing
You can set an agency fee beside the salary cost of hiring yourselves.
Justifying investment in retention
**The dearer each hire, the greater the loss when one person leaves.**
Terms in recruitment cost
- Cost per hire
- The total spent on recruitment divided by the number hired. **The figure varies greatly with what the numerator takes in.**
- External cost
- What is paid outside the company: job advertising, agency fees and so forth.
- Internal cost
- **The recruiters' salaries and the time the hiring managers gave to interviews.** Easily overlooked, yet far from trivial in money terms.
- Agency fee
- What is paid to a recruitment agency, commonly set as a proportion of the first year's salary.
- Declined offer
- An offer made but never taken up. **The cost has been incurred while the head is never counted.**
- True cost
- The cost taken with the re-hiring that early departures force. **It acquires meaning only alongside retention.**
Frequently Asked Questions
Side Note — How Cost per Hire Became a Standardized Metric
The idea of "cost per hire" had been used informally in HR for decades, but every company counted different expenses, so numbers couldn't be compared across organizations. That changed in 2012, when the Society for Human Resource Management (SHRM) worked with the American National Standards Institute (ANSI) to publish the ANSI/SHRM Cost-per-Hire standard, which precisely defines which expenses to include — job ad spend, agency fees, internal recruiter labor, recruiting event costs, and more — finally making cross-company and cross-industry benchmarking possible.
Cost per Hire is easy to misread as "lower is always better," but it really needs to be weighed against Quality of Hire. Cutting corners to minimize recruiting spend often produces underqualified hires or early departures, which forces a costly re-hire and can end up raising Cost per Hire over the long run. Strong HR teams track this metric alongside quality and Time to Hire rather than optimizing it in isolation.
Cost per Hire tends to be watched more closely at companies with high hiring volume or heavy reliance on recruiting agencies, since agency fees — often 20-30% of a new hire's first-year salary — can dominate the total. As remote hiring and specialized-skill recruiting have grown, more organizations are formally tracking this number to keep their recruiting function accountable as a real cost center.