Understanding Cost Per Hire
Cost per hire (CPH) is a key recruitment metric that measures the total cost of filling a position. It helps organizations understand their recruitment efficiency and make data-driven decisions about hiring strategies.
Industry Benchmarks (2024)
- Overall Average: $4,700 per hire
- Entry-Level Positions: $2,000 - $3,000
- Mid-Level Positions: $4,000 - $8,000
- Executive Positions: $15,000 - $30,000+
- Technical/Specialized Roles: $6,000 - $12,000
What's Included in Cost Per Hire?
According to SHRM (Society for Human Resource Management):
- Internal Costs: Recruiter salaries, interviewer time, training
- External Costs: Job advertising, agency fees, assessment tools
- Overhead Costs: Technology, office space, equipment
How to Reduce Cost Per Hire
- Build a strong employer brand to attract quality candidates
- Implement employee referral programs
- Optimize job postings for search and conversion
- Use applicant tracking systems (ATS) to improve efficiency
- Develop talent pipelines for future openings
- Leverage social media and free job boards
- Improve interview process to reduce time-to-hire
- Focus on quality of hire to reduce turnover costs
Why Cost Per Hire Matters
- Budget Planning: Forecast hiring costs accurately
- Process Improvement: Identify inefficiencies in recruitment
- ROI Measurement: Evaluate recruiting channel effectiveness
- Strategic Planning: Make informed decisions about hiring strategies
Note: While reducing cost per hire is important, it should be balanced with quality of hire. The cheapest hiring method isn't always the most effective in the long run.