Cost per Hire Calculator

The cost per hire formula is a method used by organizations to calculate the total expenditure involved in recruiting a new employee. It encompasses various costs including advertising fees, recruiter salaries, administrative expenses, and more, divided by the total number of hires within a specified period. This formula allows companies to have a clear picture of their recruitment expenses, thus aiding in budget planning and optimization strategies for the hiring process. Understanding the cost per hire is pivotal in streamlining the recruitment process and making it more cost-efficient.

The most common recruitment costs often include expenses related to advertising the job vacancies, which could be via job boards or social media platforms. Besides, it includes recruiter salaries or agency fees if an external firm is involved in the process. Other notable costs are administrative expenses which comprise tools or software used in the recruitment process, background checks, and possibly travel costs for candidates coming in for interviews. These are the primary areas where expenses accrue, and being mindful of them can assist organizations in devising strategies to control these costs without compromising the quality of the recruitment process.

To calculate the cost per hire step-by-step, you initially need to identify all the individual costs involved in the recruitment process. Start by listing down both internal and external costs. Internal costs may include the salaries of the recruitment team, while external costs involve advertising fees, recruitment agency fees, etc. Once you have a comprehensive list, sum up these costs to get the total recruitment expenditure. The next step is to determine the total number of hires in the relevant time period. Finally, divide the total recruitment costs by the total number of hires to get the cost per hire. This detailed approach ensures an accurate and insightful analysis of your recruitment expenses, allowing for more informed decision-making in future hiring endeavors.