Cost per hire calculator

Add up what it costs to fill a role, from job ads to the hours managers spend interviewing and training.

In shortCost per hire = (external hiring costs + internal hiring costs) ÷ number of hires. Internal costs include the paid time managers and staff spend on hiring and onboarding.

Who uses itRecruiters, HR managers and owners
WhenQuarterly or after each hiring campaign
You needAd, agency and screening costs, staff time, hires
ResultAverage cost of filling one position

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The formula

External = ads + agency fees + screening.

Internal = manager hours × manager cost + paid training hours × new hire cost.

Cost per hire = (external + internal) ÷ hires.

Numbers for one business

A store hires 3 sales associates. Ads cost $600 and screening $180. Managers spend 20 hours at $40 an hour, and new hires spend 48 paid training hours in total at $18. The total is $2,444, or about $815 per hire.

When to run it

Use it before you decide whether to invest in retention, to set a recruiting budget, or to compare hiring channels.

Use your own figures. The value of the calculator is that it makes hidden costs, especially management time, visible.

A second example

A property management company uses a staffing agency to find one maintenance technician. The agency fee is $3,200 and the background check and drug screen cost $90. The hiring manager spends 12 hours at $55 an hour, and the new tech has 80 paid training hours at $28. External costs are $3,290, internal time is $2,900, and the cost for this single hire is $6,190.

Making sense of the cost per hire number

Cost per hire spreads all spending across the people who started, so one expensive agency placement can lift the average for a whole quarter. It is misleading if you leave out time spent on candidates you rejected. Training hours here are the total for all new hires together, so entering one person’s hours while counting several hires understates the internal cost.

Where a cost per hire goes wrong

Leaving out interviews that went nowhere. The time spent on candidates you did not hire is still part of the cost.
Dividing by offers made instead of people who started. Use hires who actually showed up for day one.
Mixing referral bonuses into one month when they pay out later. Record them in the period the hire was made.

Variations for different teams

High-volume hourly hiringCalculate by source, such as job boards, walk-ins and referrals, to see which channel gives the cheapest hires who stay.

Specialist rolesTrack agency fees separately from internal time so you can compare doing it in-house next time.

Pro tipAdd a column for hires still on staff after 90 days. A cheap channel that loses people fast can cost more than an expensive one.

Questions about the cost per hire

What should internal costs include?

Paid time for screening, interviews, onboarding and early training.

Why measure it?

It shows what turnover costs and helps justify retention efforts.

Should lost sales count?

They are real but hard to measure. Track them separately.

How often should I calculate it?

Each quarter, or per hiring campaign.

Should I work out cost per hire for each role separately?

Yes, when roles are filled in different ways. A technician placed by an agency and a group of cashiers from one job post have very different costs, and one blended figure hides both. Run the calculator per role or per hiring channel.

How do I price a salaried manager’s interview time?

Use what the manager costs you, not what they bill. Divide annual salary and benefits by about 2,080 hours and enter that as the manager hourly cost.

Related resources

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General information and an estimate only. It is not legal, payroll, tax or financial advice. Rules vary by state and city. Check important results with a qualified professional.