What counts as an internal recruiting cost?

Recruiter salaries apportioned to hiring, hiring manager interview time, referral bonuses, ATS and internal tool costs, and onboarding administration.

What counts as an external cost?

Agency and RPO fees, job boards and advertising, assessment and background-check tools, career fairs, employer branding spend and relocation.

Should I include onboarding and training?

Standard cost per hire stops at the offer acceptance. Some teams track a separate fully loaded figure that adds onboarding and time to productivity. Pick one definition and keep it constant so trends are real.

What is a good cost per hire?

There is no universal number. Benchmark against your own previous periods and against cost as a percentage of first-year salary, which normalises for seniority.

Cost Per Hire Calculator

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The complete guide

Everything you need to know

01What the cost per hire calculator does

Enter your internal recruiting costs, your external recruiting costs and the number of hires made in the period, and get your cost per hire plus total recruiting spend. It is the standard efficiency metric for a hiring function, defined by SHRM and ISO 30414, and the number a finance team will ask for when you request budget.

02How the calculation works

Cost per hire = (internal costs + external costs) ÷ number of hires. Internal costs include recruiter and hiring manager time, referral bonuses, internal systems and onboarding admin. External costs include agency fees, job board and advertising spend, assessment and background-check tools, career fairs and relocation. Use the same period for costs and hires, usually a quarter or a year.

03Worked example

Internal costs ₹2,00,000, external costs ₹3,00,000, 10 hires in the quarter. Total spend ₹5,00,000, cost per hire ₹50,000. If agency fees make up ₹2,40,000 of the external spend, replacing agency sourcing for junior roles with a skills-test funnel is the single biggest lever on the number.

04What a normal cost per hire looks like

It varies enormously by role and country. SHRM's US benchmark has sat around $4,700 in recent years, with senior and specialist roles many times that. Agency-led hiring in India commonly costs 8% to 16% of annual CTC per hire. A useful internal benchmark is cost per hire as a percentage of first-year salary; anything above 20% for a non-executive role is worth examining.

05How to bring it down without hurting quality

Screen on skills before interviewing so hiring managers spend hours on fewer, better candidates. Replace agency sourcing for volume roles with a ready-made assessment funnel. Track source of hire so you stop paying for channels that do not convert. Measure quality of hire alongside cost, or you will optimise for cheap rather than good. springhire's free plan lets a small team test every applicant at no cost, which lowers external spend directly.