Cost Per Hire


Cost per hire, or CPH, is the total amount invested in hiring divided by the total number of hires (Total Cost of Hiring / Total Number of Hires). CPH is useful when budgeting and forecasting. For example, if you already know you are hoping to make 100 hires next year, and your CPH is $5,000, you can expect to pay $50,000 total for the year.

While it may not be obvious at first, internal and external hiring costs can add up fast. Many companies have several salaried recruiters on staff and may offer financial employee incentives for bringing in new candidates via a referral program. Externally, companies spend money on email or LinkedIn outreach software, job board ads, background checks, and the help of sourcing and recruiting firms.

According to the Society of Human Resource Management (SHRM), the average cost per hire is just over $4,000. But a variety of factors influence CPH. For example, companies going through rapid stages of growth have a high volume of new hires that might come in through the same advertising channels, therefore lowering CPH. Other companies may be hiring for very specific, tough roles to fill. As you can imagine, the costs poured into attracting these candidates might be substantially higher, and the payoff may not happen for a while.