Cost Per Hire

What is Cost Per Hire

Cost per hire (CPH) is a key metric in recruiting that measures the total cost associated with filling a single open position. It goes beyond just advertising and agency fees, encompassing all expenses involved in onboarding a new employee.

What's included in CPH ?

Internal costs

  • Recruiting staff salaries and benefits
  • Interview time and resources
  • Administrative costs (screening, onboarding)
  • Training and development

External costs

  • Job advertisements and postings
  • Recruitment agency fees
  • Background checks and drug testing
  • Relocation expenses
  • Signing bonuses

Why is CPH important ?

  • Benchmarking performance: Compare CPH to industry standards and past years to identify areas for improvement.
  • Making informed decisions: Assess the effectiveness of your hiring process and resource allocation.
  • Identifying hidden costs: Understand the true expense of each hire beyond just base salary.
  • Optimizing budget: Allocate resources efficiently to attract and retain top talent.
Calculating CPH :
CPH = (Total hiring costs) / (Number of hires)
Example: If your company spent $50,000 on hiring and made 10 successful hires, your CPH would be $5,000.
CPH varies depending on industry, role, and company size.
Lower CPH is generally desirable, but not at the expense of quality hires.
Regularly track and analyze CPH to optimize your hiring process and budget.
By understanding and managing your CPH, you can create a more efficient and cost-effective hiring strategy, ultimately attracting and retaining the best talent for your organization.

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