The true costs of recruiting


real cost of hiring Whether you’re scaling your business or looking to backfill open positions, you are hard at work hiring new employees. But how much is it actually costing you to acquire all of this new talent?

According to Bersin by Deloitte’s “Talent Acquisition Factbook 2015” the national average cost per hire in the U.S. is anywhere from $3,000 to $5,600, depending on the industry. So where does your company fall in this range?

In this post, we’ll discuss the costs of recruiting, how to calculate cost-per-hire and some recommendations for lowering the price of recruiting.

What are the costs of recruiting

Let’s start with the main question: How much will a company in the financial industry pay to attract, interview, qualify and hire the right candidate for a position? Recruiting costs fall into two categories: external and internal. These expenses can be broken down quite granularly – for example, price per interview hour or resume review – but the two lists below encompass the majority of what should generally be considered when determining the cost of recruiting.



  • Advertising and Marketing (postings on job boards and social networks)
  • Background Checks
  • Job Fair/Recruiting Events
  • Third-Party Recruiting and/or Advertising Agency Fees
  • Travel Expenses for Candidates and Recruiting Staff

  • Referral Bonuses
  • Relocation Costs
  • Salary and Benefits of Recruiting Team
  • Sign-on Bonuses
  • Talent Acquisition Systems (hardware and software)


Once these expenditures have been determined, you can use one of two formulas developed by the Society for Human Resource Management to calculate your company’s cost-per-hire.

How to calculate recruiting costs

In 2012, the Society for Human Resource Management (SHRM) established two standard equations to determine hiring costs: cost-per-hire, internal (CPHI) and cost-per-hire, comparable (CPHC).

  • Cost-per-Hire, Internal (CPHI): A formula to measure the total costs (both internal and external) associated with the sourcing, recruiting and staffing of an individual employer to fill specific positions within the organization in a designated time period.
  • Cost-per-Hire, Comparable (CPHC): A formula to compare cost-per-hire (CPH) across organizations. The data set in CPHC is not remarkably different from CPHI, but the inputs included are more restricted to ensure the data is the most commonly used by companies when determining their individual CPH.


Both CPHI and CPHC can be calculated using the following formula:

Cost per Hire = (Total External Costs) + (Total Internal Costs) / Total Number of Hires


HR professionals appreciate the CPH metric since, unlike many HR activities that are difficult to objectively quantify, cost-per-hire is based on calculable expenses. CPH also helps directly connect recruitment with cost-savings for the business.

Cost-per-hire is a crucial metric for measuring the profitability and success of your company. By meticulously tracking your expenses and using our recommendations to build your Employer brand, you can be confident your recruiting efforts are as efficient as possible.

You might also be in interested in our article: How to reduce your company’s cost-per-hire (CPH)?


Interested in learning more about creating recruitment efficiencies? Contact us here for more information.

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