Cost Per Hire
Cost per hire is total recruiting spend over a period divided by the number of hires made in it — the standard measure of what filling a role actually costs.
Also known as: cost per hire formula, recruitment cost
The number is only as honest as the costs included. External spend is easy: job boards, agency fees, background checks, the ATS. Internal cost is where figures diverge — interviewer time, recruiter salary and referral bonuses are real costs and are frequently left out, which makes the resulting figure flatteringly low.
It is most useful compared against itself over time, or split by role family. Comparing your number to an industry benchmark computed on different inclusions tells you very little.
Cost per hire read alongside attrition is more informative than either alone: a low cost per hire paired with high first-year attrition usually means the saving was made at the wrong end.
Handled in SignHR
Recruitment & Hiring
Recruitment & hiring — job openings, a drag-and-drop candidate pipeline, interview scorecards, offer letters and one-click convert-to-employee. No re-keying.
See recruitment & hiringRelated terms
ATS (Applicant Tracking System)
An ATS is the system that manages hiring — job postings, applications, candidate pipelines, interview stages and offers — from requisition to accepted offer.
Attrition Rate
Attrition rate is the proportion of employees who leave over a period, expressed as separations divided by average headcount for that period.
Offer Letter
An offer letter is the document proposing employment — role, compensation, start date and key conditions — issued before the employee accepts and joins.
Exit Interview
An exit interview is a structured conversation with a departing employee about why they are leaving and what the organisation could have done differently.