Cost per hire calculator
Enter a full year of recruiting spend to see your true cost per hire, split between external and internal costs — and how much of it is agency fees.
Your recruiting spend
Use one period, usually a financial year, and count every hire made in that same period.
External costs
Placement fees paid across the period
Board subscriptions, sponsored posts, careers events
Licence and per-candidate costs
Internal costs
Salary and on-costs for the time spent hiring
Estimated cost of interview hours
Bonuses paid out, plus any referral platform cost
People who actually started, not offers made
Cost per hire
£7,708
- External per hire
- £4,875
- Internal per hire
- £2,833
- Total spend
- £92,500
Agency fees are 52% of your total recruiting spend, or £4,000 of every hire.
Get the hiring cost briefings
Occasional emails on agency pricing, cost per hire benchmarks and referral programme design. No sales sequence.
How cost per hire is calculated.
One period, every recruiting cost inside it, divided by the people who started.
Add external costs
Agency and search fees, job adverts, job board subscriptions, assessments, background checks and careers events paid to third parties.
Add internal costs
Recruiting team salary and on-costs, hiring manager and interviewer time, referral rewards, and the tooling your team runs the process on.
Divide by hires
Count people who started in the period. Costs from unsuccessful candidates stay in the numerator, which is why a low offer-accept rate quietly raises the figure.
Cost per hire = (external costs + internal costs) ÷ number of hires. This is the definition used in the SHRM/ANSI cost-per-hire standard.
Cost per hire, answered.
What is cost per hire?
Cost per hire is the total recruiting spend for a period divided by the number of hires made in that period. The standard definition splits spend into external costs, such as agency fees, job adverts and tooling, and internal costs, such as recruiter salaries and referral rewards.
How do you calculate cost per hire?
Add all external recruiting costs to all internal recruiting costs for the period, then divide by the number of hires in the same period. Cost per hire = (external costs + internal costs) ÷ number of hires.
Does cost per hire include unsuccessful applicants?
Yes, indirectly. The formula counts total recruiting spend for the period, which includes the money spent on adverts, screening and interviews for candidates who were not hired. Only the denominator is limited to people who actually joined.
What is a good cost per hire?
There is no universal benchmark. It varies by sector, seniority and how much you rely on agencies, so the useful comparison is your own figure over time and between channels rather than an industry average. Track cost per hire by source and you can see which channels are carrying the number.
How do you reduce cost per hire?
The largest single line is usually agency fees, because they scale with salary. Reducing the share of roles that reach an agency, negotiating the salary base the fee is applied to, and building a referral channel with a fixed cost per referral are the three levers that move the number most.
Next: how to reduce cost per hire, how to reduce agency fees or compare Linillo against an agency.
Bring your cost per hire down with warm referrals.
Fixed, forecastable costs instead of a percentage of every salary.