How cost per hire is actually calculated
The formula is short: your internal and external recruiting costs for a period, divided by the hires you made in that period. SHRM and the American National Standards Institute made it a national standard in 2012, so it reads the same across companies. The work is knowing what belongs in each bucket, and most teams leave half of it out.
How this note is governed
Applies to US employers measuring recruiting cost. ANSI/SHRM 06001.2012 is a voluntary national standard, not a legal requirement.
Short answer
About $5,475. Cost per hire is total internal plus external recruiting cost, divided by the hires made in the same period. SHRM and ANSI set the formula in 2012. SHRM 2025 benchmarking puts the nonexecutive average near $5,475.
Published Last verified
Added the SHRM 2026 benchmarking cycle. Median executive cost per hire rose to $15,000 in 2026 from $10,600 in 2025.
- About 44 days
- Average time to fill an open role, a companion metric that sits alongside cost per hire rather than inside the formula
- About $5,475
- Average cost to fill a nonexecutive US role, per SHRM 2025 benchmarking. Executive roles run close to seven times that.
Two buckets divided by hires
Cost per hire takes everything you spent to fill roles in a window of time. It spreads that evenly across the people you hired in that window. The standard calls it the mean average of total recruiting costs divided by the number of hires. There are two cost buckets, internal and external, and the rule of thumb for sorting them is simple. Internal is what you spend on your own people and systems. External is what you pay to anyone outside the company.
- Internal recruiting costs. Your own effort. In-house recruiter and HR pay and benefits for the time spent hiring, plus hiring manager and interviewer time. It also includes the recruiting technology you run, such as an applicant tracking system. Referral bonuses paid to employees usually sit here too.
- External recruiting costs. Money that leaves the company. Job board and advertising spend, agency or search fees, background checks and assessments, and career fairs and events. It also includes relocation, applicant and staff travel for interviews, and a sign-on bonus when one is needed to close the hire.
The free calculator applies the SHRM and ANSI formula to your costs in a minute. The paid workbook adds the internal-versus-external split, a benchmark tab, and the cost as a share of first-year salary, so you can track the trend. Both
Sorting the costs, including what stays out
The two buckets cover the spend to make the hire. They stop at the start date. Onboarding, training, and the ramp before a new hire is fully productive are real costs. They belong to a different metric. Folding them in here inflates the number and breaks comparability with anyone using the standard.
- Internal Counts
- Recruiter and HR time priced from salary, hiring manager and panel interview time, your applicant tracking and sourcing tools, and employee referral awards. This is the bucket teams undercount, because the hours rarely show up on an invoice.
- External Counts
- Agency and search fees, job board and advertising spend, background checks and pre-hire assessments, career events, relocation, and interview travel. A contingency agency fee commonly runs 15% to 25% of first-year salary, which can dwarf every other line on its own.
- Onboarding and training Stays out
- New-hire orientation, training, equipment, and lost productivity during ramp are not part of cost per hire. They land in onboarding and total-cost-of-hire metrics instead. Keep them separate so your figure means the same thing yours did last quarter.
Match the costs to the same window of hires
The single most common arithmetic error is mixing time frames. If you add up a full year of recruiting costs, divide by a full year of hires. If you measure a quarter, use that quarter’s hires. Pairing annual costs with a single month of hiring, or the reverse, produces a number that looks precise and means nothing.
Pick a cadence and hold it. Quarterly works for most teams, monthly if you hire at volume. The value of cost per hire is the trend, so the comparison is only as good as the consistency of how you measure it. Counting recruiter time one quarter and skipping it the next will move the figure more than any real change in spending.
Three reasons your real cost is higher than you think
- Recruiter and HR time goes uncounted.The hours spent sourcing, screening, scheduling, and closing are real money, but they never arrive as a bill. Price them from salary and they often rival the external spend.
- Hiring manager and interviewer time is invisible.Every panel interview pulls people off their own work. For a multi-round loop with several interviewers, that time adds up fast, and almost no one tracks it.
- Tools and subscriptions get left off.Your applicant tracking system, sourcing seats, and assessment tools are part of the cost of hiring. Spread their cost across the hires in the period rather than ignoring them.
The benchmarks and how they have moved
SHRM has tracked cost per hire across several benchmarking cycles, and the figure has climbed. Its widely cited Human Capital Benchmarking Report put the average at about $4,129, with a time to fill near 42 days. Later benchmarking moved the average to roughly $4,700. SHRM’s 2025 benchmarking puts the nonexecutive average around $5,475. Executive hires run nearly seven times higher at about $35,879, a jump of roughly 21% over 2022. Time to fill in the 2025 data sits at about a month and a half.
Treat any of these as a reference point, not a target. Cost per hire swings hard with role seniority, industry, company size, and region. A volume of hourly roles will sit well below the headline average, while a run of specialized or leadership hires will sit far above it. Your own trend, measured the same way each period, tells you more than a national figure ever will. One caution trips people up. The ANSI/SHRM standard defines cost per hire as a mean average of costs over hires. SHRM's benchmarking briefs report the median of the responding organizations. Both are correct and they are not the same number. The 2026 medians below sit far under the older averages for exactly that reason. A median is not pulled upward by a handful of very expensive executive searches.
National averages blend wildly different roles and markets. Use them to sanity-check your number, not to set it. The most useful benchmark is your own figure over time, built the same way each period.
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Where these figures come from
5 citations checked, newest check 12 August 2026
- ANSI/SHRM 06001.2012, Cost-per-Hire Standard. The American National Standard approved 8 February 2012, the first national HR standard. It defines cost per hire as the mean average of total costs divided by the number of hires. It also lists the internal and external cost factors. Available through SHRM’s HR benchmarking and standards program. shrm.org, SHRM Benchmarking shrm.org
- SHRM 2026 benchmarking data. The current cycle, and it reports medians rather than averages. Median cost per hire for executive positions was $15,000 in 2026, up from $10,600 in 2025, $8,800 in 2022 and $5,000 in 2017. For nonexecutive positions the median moved only slightly, from $1,200 in 2025 to $1,300 in 2026, and has been broadly steady since 2017. Median time to fill fell from 44 days in 2025 to 39 days for nonexecutive roles. Executive roles held at 45 days, down from 60 days in 2022. The brief's Methods section states the basis in its own words. “The analyses in this brief use median values to define central tendency and identify trends in the data over time.” That is the basis. One dating note is easy to get wrong. SHRM labels a figure by the year the report was published, not the year the hiring happened. The 2026 report draws on the twelve months before its survey opened on 24 November 2025. Compare like with like when you set these against your own periods. shrm.org, 2026 Recruiting Executives Benchmarking shrm.org
- SHRM 2025 benchmarking data. The source for the current figures. A nonexecutive average near $5,475, and an executive average near $35,879. That executive figure is nearly seven times the nonexecutive one and up about 21% from 2022. Time to fill runs roughly a month and a half. shrm.org, 2025 recruiting benchmarking shrm.org
- SHRM, The Real Costs of Recruitment. SHRM benchmarking reporting the average cost per hire at nearly $4,700. It carries the often-quoted point that the all-in cost to fill a role can reach several times the salary once soft costs are counted. shrm.org, the real costs of recruitment shrm.org
- SHRM Human Capital Benchmarking Report. The earlier, widely cited cycle behind the familiar $4,129 average cost per hire and the 42-day average time to fill. shrm.org, $4,129 average cost-per-hire shrm.org
Common questions
What is the formula for cost per hire?
Total internal recruiting costs plus total external recruiting costs, divided by the number of hires in the same period. Internal is your own time and tools, external is what you pay outside vendors. SHRM and ANSI set this as a national standard in 2012.
Does cost per hire include onboarding or training?
No. The standard measures the cost to make the hire, ending at the start date. Onboarding, training, equipment, and ramp time are separate. Some teams track a broader total cost of hire that combines both, but that is a different metric.
What is a good cost per hire?
There is no single good number, and lower is not always better. The US nonexecutive average is around $5,475 in SHRM’s 2025 data, but it varies sharply by role, industry, and size. A figure well below average can mean efficiency or can mean you are missing costs or hiring people who do not stay. Read it next to quality of hire and early turnover.
Why is my real cost higher than I expected?
Almost always because the obvious line items, job ads and agency fees, are only part of it. Once you price recruiter time, hiring manager and interviewer time, and your recruiting tools, the picture changes. The full figure under the standard is usually higher than the cash you wrote checks for.
Put it to work
The free calculator applies the SHRM and ANSI formula to your costs in a minute. The paid workbook adds the internal-versus-external split, a benchmark tab, and the cost as a share of first-year salary, so you can track the trend. Both
$29Cost per hire alongside the metrics that give it context: time-to-fill cost, recruiter capacity, and the agency versus in-house decision.
$79
This note is general information about employment practice rather than legal advice for your situation. Check the review date and the jurisdictions above, follow the source link, and confirm the rule before you act on it.