What is Cost Per Hire?
Cost Per Hire (CPH) is a standard recruiting metric that sums all internal and external costs required to fill a position, divided by the number of hires in a period. It is the most widely used metric for evaluating recruiting efficiency.
In more detail
The Society for Human Resource Management (SHRM) and ANSI standardize the CPH formula as (Internal Costs + External Costs) / Number of Hires. External costs include job board fees, agency commissions, background checks, and travel. Internal costs include recruiter salary allocation, hiring manager time, and referral bonuses.
SHRM reported the average US cost per hire at approximately $4,700 across industries in recent benchmark data, though costs vary sharply by role level and industry. Managed offshore staffing often reduces CPH dramatically since recruiting is bundled into the monthly fee.
How it works
- Track external spend (agency, ads, assessments, travel).
- Allocate internal recruiter time and hiring manager hours.
- Add onboarding and relocation if included in scope.
- Divide by number of hires in the period.
- Segment by role level, department, and source.
- Benchmark against industry standards and over time.
Related terms
Mini FAQ
SHRM benchmarks place average US CPH around $4,700, with executive hires significantly higher.
If you offer it, yes. Any cost directly attributable to the hire should be included for benchmarking.
It usually reduces it. Managed staffing bundles sourcing into a monthly fee, eliminating separate recruiting spend.