{"id":321,"date":"2022-04-04T22:02:21","date_gmt":"2022-04-04T22:02:21","guid":{"rendered":"https:\/\/www.scoutlogicscreening.com\/blog\/how-is-recruitment-hire-cost-per-hire-calculated\/"},"modified":"2024-02-02T15:29:06","modified_gmt":"2024-02-02T15:29:06","slug":"calculate-recruitment-cost-per-hire","status":"publish","type":"post","link":"https:\/\/www.scoutlogicscreening.com\/blog\/calculate-recruitment-cost-per-hire\/","title":{"rendered":"Cost Per Hire: How To Calculate & 4 Best Practices"},"content":{"rendered":"\n

The recruitment process can be long and drawn out at the best of times. It can also be pretty expensive with the time, resources, and labor involved. But do you know exactly how much it costs you?<\/p>\n\n\n\n\n\n\n\n

If you don’t, you need to learn about the cost per hire. This metric will help you understand how much the recruitment stage is costing you and how to economize it.<\/p>\n\n\n\n

In this guide, we will take you through calculating the Cost Per Hire (CPH) and how to make the hiring process as efficient and cost-effective as possible.<\/p>\n\n\n\n

What Is Cost Per Hire?<\/h2>\n\n\n\n

Cost per hire refers to how much it will cost you each time you recruit a new member to your team. It’s an essential metric for businesses to measure to ensure they don’t overextend themselves during the hiring process.<\/p>\n\n\n\n

Inefficient hiring practices can lead to premature dismissal of staff, which isn’t good for anybody. The cost of turnover can amount to 33% of an employee\u2019s salary<\/a>.<\/p>\n\n\n\n

Knowing the cost per hire ensures that you can optimize every aspect of the hiring process<\/a>. It also helps to ensure that hiring managers and recruiters understand the financial stakes involved every time they start the hiring process.<\/p>\n\n\n\n

Cost Per Hire Formula<\/h2>\n\n\n\n

Different businesses have different ways of working out their CPH, but there is a standardized formula you can follow to get you started:<\/p>\n\n\n\n

(Internal recruitment cost + External recruitment cost) \/ total number of hires = CPH<\/p>\n\n\n\n

For example, say you spent $100,000 on the recruitment process and hired 30 candidates. Your CPH would be $3333.<\/p>\n\n\n\n

Whether this reflects your overall spending is entirely individual to your business. The only way to know if your recruitment process is economical is by breaking it down into key steps.<\/p>\n\n\n\n

Internal Recruiting Costs<\/h2>\n\n\n\n

Half of your equation is your internal recruiting costs, but what are they? We’ve broken down some of the most common below:<\/p>\n\n\n\n