Cost per Hire
Definition
The total cost of filling a position, including advertising, recruiter time, tools, and agency fees divided by the number of hires.
Cost per Hire (CPH) is a key metric for evaluating recruiting efficiency. The SHRM formula includes both internal costs (recruiter salaries, hiring manager time, referral bonuses) and external costs (job board fees, agency fees, tools, travel).
Average CPH varies widely: $4,000-$7,000 for standard roles in the US, but $15,000+ for executive positions. Tech roles tend to be on the higher end due to competitive sourcing costs.
Reducing CPH without affecting quality requires smart tool choices: free sourcing channels, automated screening to reduce recruiter hours, and employee referral programs which consistently deliver the lowest CPH with the highest retention.
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Related Terms
Time to Fill
The number of days between opening a job requisition and a candidate accepting the offer.
Quality of Hire
A composite metric measuring the value a new employee brings, typically assessed through performance reviews, retention rate, and hiring manager satisfaction.
Candidate Pipeline
The structured sequence of stages a candidate moves through during the hiring process, from initial contact to offer.