Calculate the average recruiting cost per hire.
Cost per hire is total recruiting spend divided by the number of hires made in that period: CPH = total recruiting costs ÷ number of hires. This is the standard formula used in SHRM's widely-adopted cost-per-hire methodology.
'Total recruiting costs' typically includes both internal costs (recruiter salaries, internal referral bonuses, HR technology) and external costs (job board postings, agency fees, advertising) for the period being measured.
This metric is most useful tracked over time and compared against industry benchmarks for your sector and role type, rather than viewed as a single isolated number.
$50,000 in total recruiting costs producing 10 hires gives a cost per hire of $5,000.
The SHRM standard includes both internal costs (recruiter time, referral bonuses, HR systems) and external costs (job postings, agency fees, advertising, background checks) for the measurement period.
Significantly — executive and highly specialized technical roles typically cost far more per hire than high-volume entry-level positions, so comparing CPH across very different role types can be misleading.
Not necessarily — an unusually low CPH can sometimes indicate under-investment in sourcing quality, which may show up later as higher turnover. It's one metric among several, not a standalone success measure.