Cost Per Hire Calculator Formula
Understand the math behind the cost per hire calculator. Each variable explained with a worked example.
Formulas Used
Cost Per Hire
cost_per_hire = total_hires > 0 ? (external_costs + internal_costs) / total_hires : 0Total Recruiting Cost
total_recruiting_cost = external_costs + internal_costsExternal Cost Share
external_pct = (external_costs + internal_costs) > 0 ? (external_costs / (external_costs + internal_costs)) * 100 : 0Variables
| Variable | Description | Default |
|---|---|---|
external_costs | External Recruiting Costs (agencies, job boards, ads)(USD) | 30000 |
internal_costs | Internal Recruiting Costs (recruiter salary, tools, referral bonuses)(USD) | 20000 |
total_hires | Total Hires | 10 |
How It Works
How to Calculate Cost Per Hire
Formula
Cost Per Hire = (External Costs + Internal Costs) / Total Hires
This metric follows the ANSI/SHRM standard formula. External costs include agency fees, job board postings, career fairs, and advertising. Internal costs cover recruiter compensation, ATS software, employee referral bonuses, and interview expenses. Tracking cost per hire helps you optimize recruiting budgets and compare sourcing channels.
Worked Example
A company spent $30,000 on external recruiting and $20,000 on internal recruiting to make 10 hires.
external_costs = 30000internal_costs = 20000total_hires = 10
- 01Total Recruiting Cost = $30,000 + $20,000 = $50,000
- 02Cost Per Hire = $50,000 / 10 = $5,000
- 03External Cost Share = $30,000 / $50,000 x 100 = 60%
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