How to calculate cost per hire

Calculate cost per hire in two parts

Add your internal and external recruiting costs, then divide by the number of hires in the same period. The result is the arithmetic mean, or average cost per hire. Internal costs include employee time and recruiting systems. External costs include payments to recruiting vendors and other outside providers.

1. Internal recruiting costs. Include recruiter and HR time, hiring manager and interviewer time, recruiting technology, sourcing subscriptions, and employee referral bonuses.
2. External recruiting costs. Include payments to recruiting vendors and other outside providers: job board and advertising expenses, agency or search fees, background checks, assessments, career fairs, and recruiting events. Also count relocation, applicant and employee interview travel, and sign-on bonuses used to secure a hire.

What belongs in cost per hire

The standard covers the costs of finding, evaluating, and hiring employees. Track onboarding, training, equipment, and the time it takes new employees to become fully productive as separate costs.

Internal Counts

Recruiter and HR compensation, hiring manager and interviewer time, applicant tracking systems, sourcing tools, and employee referral awards. Use compensation costs to estimate employee time.

External Counts

Agency fees, job advertising, background checks, pre-hire assessments, career events, relocation, and interview travel. Contingency agency fees commonly range from 15% to 25% of first-year salary.

Onboarding and training Track separately

Include orientation, training, equipment, and new-hire ramp productivity in a separate total-cost-of-hire analysis.

Match recruiting costs and hires by period

Use the same reporting period for recruiting expenses and completed hires. For an annual calculation, divide annual recruiting costs by annual hires. For a quarterly calculation, use costs and hires from that quarter.

Choose a reporting schedule that fits your hiring volume. Quarterly reporting works for most teams, while monthly reporting can be useful when hiring volume is high. Use the same cost categories each period to see how recruiting expenses change over time.

Three internal recruiting costs to include

• Recruiter and HR time. Count the hours spent sourcing, screening, scheduling, interviewing, and completing hires. Use compensation costs to estimate the value of that time.
• Hiring manager and interviewer time. Include time spent reviewing candidates, interviewing, and making hiring decisions. Multiple interview rounds can add substantial employee time and cost to a search.
• Recruiting technology. Add applicant tracking systems, sourcing subscriptions, and assessment tools. Spread these expenses across the hires made during the reporting period.

Compare recruiting costs across benchmarks

SHRM's recruiting benchmarks provide useful comparisons for evaluating hiring costs over time. Its widely cited Human Capital Benchmarking Report put the average at about $4,129, with a time to fill near 42 days. SHRM’s 2022 benchmarking reported an average of nearly $4,700. In 2025, SHRM reported an average of around $5,475 for nonexecutive hires. The average cost per executive hire was approximately $35,879, nearly seven times the nonexecutive average and roughly 27% higher than SHRM's 2022 executive average of $28,329. The 2025 nonexecutive median was $1,200, compared with $1,244 in 2022 and $1,633 in 2017. SHRM’s 2025 data also puts time to fill at approximately a month and a half.

Use these figures as reference points alongside your own recruiting trends. Cost per hire varies considerably by role seniority, industry, company size, and region. High-volume hourly hiring may cost less per hire than specialized or leadership recruiting. Use national benchmarks for context and your own recruiting results to identify what is changing inside your business. The ANSI/SHRM standard uses the mean average of recruiting costs divided by hires. SHRM's benchmarking briefs also report the median across responding organizations. In 2025, the median was $1,200 and the average was $5,475. The median represents the middle reported result, while expensive searches have a greater influence on the average.