Cost Per Hire (CPH)
Last updated: Apr 29, 2025
What is Cost Per Hire?
Cost Per Hire is a fundamental recruiting metric, that helps Human Resource professionals budget, calculate a return on their effort, and understand how effective their employee brand is when recruiting talent. Cost Per Hire is defined as the internal and external costs required to hire a new employee.
Cost Per Hire Formula
Start tracking your Cost Per Hire data
Use Klipfolio PowerMetrics, our free analytics tool, to monitor your data.
Get PowerMetrics Free
What is a good Cost Per Hire benchmark?
Cost per hire benchmarks range from $1,500-$5,000 for entry-level positions in small businesses to $7,000-$15,000 for mid-level professionals in mid-sized companies across most industries, while specialized technical roles, healthcare professionals, and executive positions can range from $15,000-$30,000+ particularly in larger enterprises and competitive sectors like technology, finance, and healthcare.
How to visualize Cost Per Hire?
Use a summary chart to visualize your Cost Per Hire data and compare it to a previous time period.
Cost Per Hire visualization example
Summary Chart
Cost Per Hire
Chart
Measuring Cost Per HireMore about Cost Per Hire
An important metric in Human Resources is figuring out what the average amount of money the business spends on making a new hire. This number is especially helpful for creating and tracking a recruiting budget, and determining whether or not it's being spent wisely.
An equally interesting metric to evaluate is the Recruiting Cost Rate (RCR), which contemplates the recruiting costs alongside their annual salary. For example, if you spent $10K to recruite a new resource earning $100K per year, then your RCR would be 10%.
Cost Per Hire Frequently Asked Questions
What costs should we include in our Cost per Hire calculation?
Include both external costs (job board fees, agency fees, advertising, relocation expenses) and internal costs (recruiter salaries, interview time from hiring managers, onboarding resources, referral bonuses). Many organizations underestimate their true Cost per Hire by focusing only on direct external expenses. For example, a seemingly inexpensive hire costing $2,000 in external fees might actually cost $8,500 when properly accounting for 25 hours of internal interview time from senior staff.
How does Cost per Hire vary across different roles?
Significantly. Executive positions might cost $30,000+ to fill, technical specialists $10,000-15,000, and entry-level positions $3,000-5,000. Establish different benchmarks for various job families rather than using a single company-wide target. A healthcare organization would expect much higher costs for recruiting specialized physicians compared to administrative staff.
Our Cost per Hire seems high compared to benchmarks—is this necessarily bad?
Not always. Higher acquisition costs may be justified when they yield better quality hires, reduce time-to-fill for critical roles, or improve retention. Consider the complete picture—spending $12,000 versus $8,000 per hire is actually cost-effective if it results in employees who stay 30% longer or perform 20% better. The true measure is return on hiring investment, not just the initial cost.
How should we balance Cost per Hire with other recruiting metrics?
Cost per Hire should never be evaluated in isolation. Always examine it alongside quality of hire, time-to-fill, and new hire retention metrics. A retail chain that reduced their Cost per Hire from $4,500 to $3,000 would not be successful if their 90-day turnover increased from 15% to 25%, effectively increasing their annualized recruitment costs despite the lower cost per individual hire.