Cost per Hire

What is Cost per Hire (CPH)?

This metric calculates the average cost your company spends on new hires.

How to calculate Cost per Hire (CPH):

( Internal Recruiting Costs + External Recruiting Costs ) / total # of hires = Cost per Hire (CPH)

To accurately track this number, you should be keeping a record of all your recruitment spending and ensure you are using the same timeframe for spend and hires.

Some example spending you might include: external recruiter costs, advertising and platform fees, cost of time for your internal hiring teams, etc.


Tracking Cost per Hire helps hiring teams create recruitment budgets and stick to them. It’s easier to allocate the right budget to the right activities if you consistently quantify your recruiting expenditure.

Comparing this data with Source of Hire and Candidates per Hire will help validate whether you’re putting effort into the right areas.


Sticking too much to optimizing cost per hire can affect quality of hire. The best people might be expensive or take longer to acquire, but they’re a guarantee for long-term success. For example, if you notice that cost per hire has tripled since the beginning of the year, it wouldn’t necessarily be a bad thing. You might have hired better (and more highly paid) recruiters, or advertised in paid (instead of free) job boards, which can result in better hires, despite their cost.