Loading page
All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
Total recruitment spend in a period divided by the number of hires made. External costs such as agency fees, job boards and referral bonuses are easy to count; internal costs such as recruiter salaries and interviewer time are often left out, which makes figures from different sources hard to compare.
Recruitment teams usually calculate cost per hire quarterly or yearly, when finance closes recruitment spend. The HR analyst pulls agency invoices, job board subscriptions, assessment and background check costs, and referral payouts, then adds an agreed share of the recruiting team's salaries.
Illustration: in a quarter, external costs are ₹9,00,000 and the internal recruiting cost allocated is ₹6,00,000, with 25 hires. Cost per hire is ₹60,000. If agency hires account for most of the external spend, their cost per hire may be several times that of referrals.
A practical difficulty is timing: an agency invoice may arrive a month after the joining date. Matching costs to hires in the same period, or accruing invoices, avoids a quarter that looks cheap followed by one that looks expensive. The figure is most useful when tracked against the same definition over several periods.
Add external costs such as agency fees, job board spend, assessments and background checks to internal costs such as recruiter time and referral bonuses. Divide the total by the number of hires made in the same period.
Practice varies, so decide once and apply it consistently. Many organisations keep joining bonuses out, because they are part of the offer package rather than a cost of finding the candidate.
A single average hides the difference between agency hires, referrals and direct applications. Splitting it by source shows where the recruitment budget actually buys hires.
Not on its own. It should be read alongside time to hire and how many hires stay past probation, since cheap hires who leave early cost more in the end.
14-day free trial · Full access to all 12 modules · Zero implementation fee · Cancel anytime