Cost Per Hire Calculator
Calculate the average cost your organization spends to bring each new employee on board, including recruitment and training expenses. Used by HR and finance teams to budget hiring cycles and evaluate recruiting efficiency.
About this calculator
Cost per hire measures the total investment a company makes to recruit and onboard each new employee during a given period. The formula is: cost per hire = (recruitment_costs + training_costs) / new_hires. Recruitment costs include job postings, agency fees, background checks, and recruiter time. Training costs cover onboarding programs, materials, and the time of trainers or managers. Dividing the combined total by the number of new hires gives an average figure per employee. According to SHRM benchmarks, the average cost per hire in the US is approximately $4,700, though technical and executive roles can run significantly higher. Tracking this metric helps HR teams identify where recruiting spend is disproportionate and improve cost efficiency.
How to use
Assume your company spent $12,000 on recruitment activities (job boards, agency fees) and $8,000 on training programs during a quarter, and you hired 10 new employees. Step 1: Add total costs — $12,000 + $8,000 = $20,000. Step 2: Divide by new hires — $20,000 / 10 = $2,000 per hire. Your cost per hire is $2,000 for that quarter. If next quarter you hire 20 people with the same spend, cost per hire drops to $1,000, showing improved efficiency.
Frequently asked questions
What costs should be included when calculating cost per hire?
Recruitment costs typically include job board fees, staffing agency commissions, employee referral bonuses, background check fees, interview travel reimbursements, and the allocated time of internal recruiters. Training costs cover new-hire orientation programs, role-specific training materials, software licenses for e-learning platforms, and the productive time of managers or trainers involved in onboarding. Some organizations also include relocation assistance and signing bonuses. The more comprehensively you capture costs, the more accurate and actionable your cost-per-hire figure will be.
How can a company reduce its cost per hire without sacrificing quality?
Building a strong employer brand reduces reliance on expensive job boards and recruitment agencies by attracting inbound applicants organically. Employee referral programs are consistently one of the most cost-effective sourcing channels, often producing high-quality hires at a fraction of agency costs. Improving retention reduces the frequency of backfills, which are often more expensive than planned hires. Investing in structured onboarding also reduces early turnover, meaning training costs produce a longer return.
What is the average cost per hire and how does it vary by role or industry?
According to SHRM research, the average cost per hire across all industries in the US is approximately $4,700. However, executive and highly specialized technical roles can cost $20,000–$30,000 or more when factoring in executive search firms and extended onboarding. Entry-level and high-volume roles in retail or hospitality tend to have lower per-hire costs but higher total annual spend due to volume. Industry, company size, and recruiting strategy all significantly influence where your cost per hire falls relative to benchmarks.