Why Calculate Cost Per Hire?

Cost per hire (CPH) is a key recruiting metric that represents the average cost incurred for each new employee hired. Calculating this figure helps organizations identify where resources are being spent most effectively and where adjustments could lead to savings.

• Budget Transparency: Understand exactly where recruitment dollars are spent and optimize accordingly.
• Data-Driven Adjustments: Identify and mitigate costly stages in your hiring funnel.
• Informed Financial Planning: Plan for future hires with accurate estimates.

The Society for Human Resource Management reports that hiring a new employee in the U.S. costs about $4,700 on average. Organizations that actively measure this metric are better equipped to manage budgets and avoid overspending.

Tracking CPH also helps identify inefficiencies in the recruitment process. For example, businesses can reduce high costs by optimizing job ads, leveraging employee referrals, or automating repetitive tasks.

What is a Recruitment Budget?

A recruitment budget encompasses all costs associated with attracting, interviewing, and hiring new employees. This budget includes both fixed costs and variable costs, ensuring resources meet hiring goals.

• Strategic Resource Allocation: Use resources where they will be most effective in attracting high-quality candidates.
• Cost Containment: Prevent unexpected expenses and improve financial predictability.
• Improved Candidate Quality: Ensure budget availability for tools and campaigns that reach top talent.

A well-planned recruitment budget not only supports effective hiring but also contributes to long-term workforce stability. Companies that allocate funds wisely can focus on retaining top employees while avoiding unnecessary hiring costs.

How to Use the Calculator

Our Cost Per Hire and Recruitment Budget Calculator breaks down your recruitment budget by category, giving you a clear view of:

• Internal Recruiting Costs – including recruiter salaries, support staff, and interview stipends.
• External Recruiting Costs – such as job board ads, social media promotions, and employer branding campaigns.
• Optional Costs – employee referral bonuses, contingency expenses, and other adjustable elements.

Simply enter each line item in the calculator, including the number of hires you expect to make, to generate an accurate view of your overall recruitment budget and cost per hire.

The tool is easy to use and provides actionable insights for HR teams to refine their recruitment strategy. By understanding where costs are concentrated, you can prioritize spending on high-impact areas like talent acquisition campaigns or streamlined interview processes.