What is the standard cost per hire formula?

The Society for Human Resource Management (SHRM) defines cost per hire as: (External Recruiting Costs + Internal Recruiting Costs) ÷ Total Number of Hires. This is the most widely used standard for benchmarking.

What counts as an external recruiting cost?

External costs are paid to outside vendors or candidates: staffing agency fees, job board postings, career fair attendance, background check services, pre-employment assessments, relocation packages, and signing bonuses.

What counts as an internal recruiting cost?

Internal costs are incurred inside the organization: recruiter and HR staff salaries (prorated for time spent on recruiting), applicant tracking system (ATS) subscriptions, interview panel time, employee referral bonuses paid out, and onboarding administration.

What is a good cost per hire benchmark?

SHRM reports a median cost per hire of about $4,700 in the US, but it varies widely by industry, role seniority, and geography. Executive or highly specialized roles can exceed $30,000. The number is most useful when tracked over time within your own organization.

Should I include signing bonuses in the calculation?

Yes — signing bonuses are a direct cost of securing a hire and are typically included as an external cost. Onboarding and training costs are sometimes included in an extended definition, but the core SHRM formula excludes them.

Cost Per Hire Calculator

Name: Cost Per Hire Calculator
Availability: InStock
Author: Nham Vu

Add your internal and external recruiting costs, enter the number of hires, and get your cost per hire instantly.

External Recruiting Costs

Agency / staffing fees

Job board & advertising costs

Background checks & assessments

Relocation & signing bonuses

Internal Recruiting Costs

HR / recruiter staff time (period cost)

ATS & recruiting software (period cost)

Employee referral bonuses paid

Interview panel time cost

Hires

Number of hires in this period

Cost Per Hire (SHRM Formula)

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per hire

Cost Breakdown

Total external costs —

Total internal costs —

Total recruiting costs —

Cost Mix

External — Internal —

Per-Hire Cost Split

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external / hire

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internal / hire

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Summary

Add your internal and external recruiting costs, enter the number of hires, and get your cost per hire instantly.

How it works

Enter your external recruiting costs — agency fees, job board ads, background checks, relocation, and signing bonuses.
Enter your internal recruiting costs — HR staff time, recruiting software, employee referral payouts, and interview time.
Enter the total number of hires made in the same period.
The calculator divides total costs by number of hires using the SHRM standard formula.
Review the cost breakdown to see which cost category drives the most spend.
Adjust any input and the result updates instantly.

Use cases

Benchmark recruiting efficiency against the SHRM industry average (~$4,700).
Build a hiring budget for next fiscal year.
Justify an ATS or recruiting software investment by tracking cost reduction.
Compare in-house recruiting costs versus agency fees.
Measure the ROI of an employee referral program.
Report recruiting metrics to finance or the board.
Identify which cost categories to cut to hit a target CPH.
Track cost per hire trend across quarters.

Frequently Asked Questions

Last updated: 2026-06-11 · Reviewed by Nham Vu