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Cost per hire calculator

Add up what each hire actually costs you, internal time and external spend, using the SHRM standard formula.

Your numbers

Recruiter time, interview hours, coordination, ATS share
Job boards, agency fees, checks, referral bonuses
Your cost per hire
 
Share
How is cost per hire calculated?

Add your total internal recruiting cost to your total external recruiting cost, then divide by the number of hires in the same 12 months. Internal covers recruiter time, interview hours, and coordination. External covers job boards, agency fees, checks, and bonuses. This matches the SHRM and ANSI standard.

How we calculated this

Cost per hire is your total internal recruiting cost plus your total external recruiting cost, divided by the hires you made in the same 12 months. That is the SHRM and ANSI standard formula, which is why the result can be set against published benchmarks. We also show an internal and an external cost per hire, because the two move for different reasons: internal is mostly people's time, external is mostly invoices. The number stands for what it takes to get one person to an accepted offer, not what it takes to make them productive. The working, the assumptions and the sources are below.

New to the term? Read the plain-English definition of cost per hire in the HR Glossary.

Your working
Assumptions
  • Internal cost means recruiter time, hiring manager time, HR coordination and your share of the applicant tracking system and other tools. Most teams undercount interview hours; if you left them out, your figure is low.
  • External cost covers job boards, agency fees, background checks, assessments, referral bonuses and relocation. Agency fees are the swing item: the commonly quoted market range is 15 to 25% of first-year salary, so a handful of agency placements can move the average more than everything else combined.
  • The denominator is people who started, not offers made. Counting offers that fell through makes the number look better than it is.
  • The SHRM 2025 benchmark of about US$5,475 per non-executive hire (US$35,879 executive) is a United States average from 2,371 SHRM members surveyed between January and March 2025. It is a reference point rather than an Australian target, and the SHRM standard leaves out onboarding, training and equipment, so it understates the cost of getting someone productive.
Sources

What to do about it

Cost per hire is a budget line until you split it. Split, it tells you whether you are paying for reach or paying for rework. These steps are for whoever owns the recruiting spend, whether that is a talent lead, an HR generalist, an office manager who also recruits, or the finance partner who approves the agency invoices.

1

Report the split, not the average

Take the internal and external figures above into the budget conversation as two lines and say which one is rising. External rising while hires stay flat usually means agency dependence. Internal rising while hires stay flat usually means a slow process burning manager hours. The average hides both.

2
Where a tool helps

Cost the roles you hired twice

Every hire you replaced inside 12 months cost you the number above twice, plus the salary paid in between. Pull the exits under 12 months' tenure from the last two years and multiply. That figure usually dwarfs anything you will save renegotiating job boards, and it is the argument for spending on selection rather than cutting it.

3

Write down which roles earn an agency fee

In 2025, 13% of Australian employers who recruited used a recruitment agency or government employment service, and 20% did for hard-to-fill roles against 8% for easier ones. Agencies earn their fee on scarcity and speed. Set the rule (scarce skills, confidential searches, new locations, roles you have failed to fill directly within an agreed number of days) so a busy manager cannot default to the agency because it is easier.

4

Track cost per good hire, not cost per hire

Only 20% of organisations measure quality of hire, which means most cost per hire numbers reward the cheapest process. Add two columns to your hiring log: still employed at 12 months, and manager rating at six months. Divide the spend by the hires that passed both.

5

Fix the definitions and re-run it quarterly

Write down once what counts as internal and what counts as external, and hold it. Movement in the number only means something if the definition stayed still.

Step 2 is where
the money leaks.

Compono Hire is an applicant tracking system (ATS) that measures fit before you make the offer. It runs the process side you already pay for (job posting, pipeline, interview scheduling, offers) and adds what most ATSs skip: a validated work personality and culture fit read on every candidate, scored the same way every time and shown beside the skills screen.

The rehires you counted in step 2 are the fit failures your current tools could not see coming, and each one costs the figure above twice. Cutting them is the largest saving in this calculator, and it happens at the shortlist, where Hire puts the evidence in front of the hiring manager before the offer goes out.

See how it works
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Common questions

What is a good cost per hire?

The SHRM 2025 benchmark is about US$5,475 per hire for non-executive roles, rising to around US$35,879 for executive positions. Anything well above the benchmark usually points to heavy agency reliance or a slow process, both of which you can improve.

Why include internal costs?

Internal costs are real money. Recruiter salaries, hiring-manager hours, and coordination time add up fast and often outweigh external spend on volume roles. Leaving them out makes hiring look cheaper than it is and hides where you could save.

How do I lower my cost per hire?

Reduce agency dependence with stronger internal sourcing and referrals, speed up your process to cut wasted hours, and improve hire quality so you are not paying to replace people. Better fit at the offer stage is the largest long-term saving.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with the relevant authority in your country or your own adviser. Last reviewed July 2026.

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Cost per hire

The plain-English definition, with the calculators and rules that sit around it.

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