What is Cost-Per-Hire?

Cost-per-hire is a talent acquisition metric that calculates the total investment required to fill one position. As defined by SHRM and ANSI standards, it includes both internal costs (recruiter salaries, hiring manager time, employee referral bonuses, internal technology and systems) and external costs (job board postings, agency fees, background checks, assessment tools, relocation expenses, and signing bonuses). The formula divides total recruiting costs by total number of hires in a given period.

Cost-per-hire varies significantly by role level, industry, and geography. Entry-level positions may cost $3,000-5,000 to fill, while senior executive searches can exceed $50,000 when agency fees and extensive interview processes are factored in. Technology and healthcare roles with scarce talent pools tend to have higher costs due to competitive recruiting and longer time-to-fill.

While cost-per-hire is one of the most widely tracked recruiting metrics, it should be interpreted carefully. An organization that cuts cost-per-hire by eliminating quality assessment steps may save money upfront but pay significantly more in bad-hire costs downstream. The metric is most valuable when paired with quality-of-hire indicators (new hire performance, retention rates, hiring manager satisfaction) to ensure that cost optimization does not compromise talent quality. Organizations should also separate cost-per-hire by role family and seniority to make meaningful comparisons.

Recruiting is one of HR's largest budget items, and understanding cost-per-hire helps organizations allocate resources efficiently, benchmark against industry norms, and evaluate the ROI of different sourcing channels. More importantly, when tracked alongside quality metrics, cost-per-hire helps organizations find the optimal balance between recruiting investment and talent quality. For HR leaders, demonstrating cost efficiency in hiring while maintaining quality is a key measure of operational excellence.