What Is the Average Cost per Hire in 2023?

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Posted by: David Garcia April 14, 2022

Hiring managers are responsible for filling a job position with the right candidate. Recruitment involves interviewing and narrowing down the pool of applicants. After hiring the best candidate, there is an onboarding process followed by a training period.

This process costs money, and the costs can fluctuate with the market. If you don’t know what the cost per hire is for your company, you could end up overstretching your budget.

From a business perspective, it’s crucial to reduce the cost of hiring as much as possible. The first step is understanding the cost per hire specific to your company. Then, you’ll want to improve employee retention and keep turnover low.

We know—it’s easier said than done. Keep reading to learn everything you need to know about cost per hire in 2023.

The General Cost of Hiring

The average cost per hire in the United States is around $4,000. Besides the actual hiring process, you have to calculate the recruiting, onboarding, and training costs.

Here are some factors that impact the cost per hire:

HR Specialist

You likely have someone assigned to do the hiring. This contact might be your human resources team or a hiring manager. This professional is an essential asset to any company.

Qualified HR specialists understand the best way to onboard employees and reduce costs. They handle everything from the job posting to setting a salary for the employee and conducting the necessary training for new team members.

All of this is essential, but it comes at a cost. As of 2020, the average pay for human resource specialists is $63,490 per year.

External Recruiter

A smaller business without an HR department could consider an external recruiter. They facilitate hiring by finding qualified candidates. They often already have a pool of expert applicants with suitable qualifications.

However, external recruiting agencies also come at a price. Each has its unique pricing structure, which can be a fee of the employees’ salary or a flat rate.

Whatever their pay structure might be, this adds to the overall cost of onboarding a new team member.

Open Position

Are you trying to hire a franchise employee or a public sector one? Is the position that you need to fill an entry-level or executive-level job?

The open position contributes to the cost per hire. It will cost much less to hire an entry-level employee than it would an executive-level one.

It will also take longer to hire a public sector employee than it does to hire a franchise employee. The more time it takes, the more money spent on recruiting efforts.

Job Postings

Writing a compelling and inclusive job posting takes time. The job description posted for your company makes all the difference to the pool of applicants who apply.

Job postings require carefully crafting, reviewing, and approval by your internal team to captivate the right type of people.

Once approved, you’ll need to post it on several platforms, which also takes time. And, if we know one thing for sure, time is money.

Candidate Screening & Background Checks

Have a nice long list of candidates? Now comes the most time-consuming part. You need to sort through resumes, find potential employees, and schedule interviews.

When you find the right candidate(s), you need to run a background check to verify information like:

  • Education
  • Work experience
  • Past identities
  • Criminal history

Your internal HR team can do this for you, but you can also outsource the background screening if you lack one. Regardless of if you vet candidates internally or externally, the process is time-consuming. It will add to the overall cost per hire.


The compensation is perhaps the most obvious cost that comes with hiring. You want to ensure your employee gets a fair wage and benefits like health insurance or a retirement plan. The benefits will impact your budget, so think about what perks you want and don’t want to provide.

Note: Keeping your employees happy with their salary and benefits is an effective way to keep them focused, leading to improved employee retention and saving money in the long run.


How many hours of training does your employee need? To be successful in their new role, they need to learn the ropes. Even experienced candidates need adequate training to understand your business policies and processes.

Training expenses can quickly add up; however, these expenditures are worth it. Your new employee will get up to speed quickly and feel more secure in their new position.

Cost Per Hire Demographic Statistics

Hiring an entry-level employee will cost much less than hiring an executive-level employee. Hiring younger employees is typically less expensive because they have less experience. Older adults with more experience will expect higher compensation.

The average cost also varies depending on the industry. For example, management positions will have a higher cost per hire than a sales position in staffing firms.

Frequently Asked Questions

What Is the Cost per Hire?

Cost per hire refers to the amount of money spent when hiring a new employee.

Let’s say you want to hire ten people in a given year. The average cost per hire is $4,000. Therefore, you can expect to spend a total of $40,000.

Using this metric allows you to compare costs every year to see if there have been any drastic changes.

How Is Cost Per Hire Calculated?

Use the following basic equation to calculate the total cost per hire:

Total number of hires (in a fiscal period) / total recruitment cost (for the same period) = cost per hire

Let’s say your total recruitment cost in 2021 was $200,000, and you hired 50 people. It means your cost per hire is $4,000.

What Is a Good Benchmark When Assessing Cost per Hire?

A good benchmark for the cost per hire is anywhere between $2,000 to $5,000. This figure can be lower or higher depending on your business’s size, location, industry, and open positions.


Knowing the average cost per hire is critical to protecting your bottom line, but it fluctuates constantly.

One thing that doesn’t change? The quality of service you can expect from ScoutLogic. Contact us to learn more about how our background screening services can help you save.

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