Calculating the true cost of hiring an employee is crucial for optimizing your recruitment budget. Our Cost per Hire Calculator offers an easy way to assess both internal and external hiring expenses, giving you clear insights into what each new hire costs your business.
Cost Per Hire Calculator
This free tool is built by Connecteam, the platform for managing your team.
How to Use the Cost per Hire Calculator
- Enter Basic Info by providing total hires and average hours spent per hire.
- Add Internal Costs by entering HR salaries, referral awards, signing bonuses, and interview costs.
- Include External Costs by entering job board fees, ATS fees, background checks, drug testing, and other external fees.
- Click Calculate to see a detailed breakdown of your total cost per hire.
Cost per Hire Calculator
General Information
Include all hires, even those who left.
Time spent per role.
Internal Hiring Costs (Annual)
Total HR salaries spent on hiring per year.
Bonus for employee referrals.
One-time hiring bonuses.
Expenses for interviews.
External Hiring Costs (One-Time per Hire)
Cost per ad placement.
Cost for tracking applicants.
Background check cost per candidate.
If applicable.
Marketing for job postings.
Specialized recruiter fees.
Costs for job fairs or campus events.
For relocating new hires.
One-time bonuses for new hires.
Your Results
Internal Cost per Hire:
$0.00
External Cost per Hire:
$0.00
Total Cost per Hire:
$0.00
What is Cost per Hire?
The cost per hire metric represents the total expenses associated with recruiting a new employee, divided by the number of hires. It gives you a realistic look at how much it actually costs to bring a new employee into your company. Understanding this cost helps you optimize your recruitment budget, identify cost-effective hiring channels, and forecast accurately for future hiring cycles.
How to Calculate Cost per Hire
Cost per hire is calculated by combining two main cost categories: internal and external costs.
Cost per Hire = (Total Internal Hiring Costs + Total External Hiring Costs) / Number of Hires
For example: If you hired 10 people and spent $30,000 on internal costs (HR salaries, interview costs) and $13,000 on external costs (job boards, background checks), your total cost is $43,000. Divide that by 10, and your cost per hire is $4,300.
Streamline Your Hiring Costs with Connecteam
Manage your entire hiring process with Connecteam and start saving time from day one. Post jobs, track applicants in a centralized hiring pipeline, and automatically screen candidates with role-specific questions. Once you’ve hired, send custom onboarding packets with e-signatures for contracts and forms like I-9s and W-4s, all completed directly in the app. Connecteam then automatically assigns managers, roles, and permissions, while securely storing employee documents, licenses, and certifications with automatic expiration reminders to keep your business organized and compliant. Try Connecteam for free today!
FAQs
The cost per hire represents the total expenses associated with recruiting a new employee, divided by the number of hires. It’s essential because it helps HR teams and managers assess the efficiency of their hiring processes and budget appropriately.
To calculate cost per hire, add up all internal and external recruitment expenses and divide by the total number of hires. Internal costs might include HR salaries and referral bonuses, while external costs can cover job board fees and background checks. This calculator simplifies the process by automatically calculating costs based on your input.
Internal hiring costs cover expenses within your organization, such as recruiter salaries, employee referral bonuses, and interview costs. External hiring costs involve fees paid to third parties, like job boards, advertising, and background checks.
A cost per hire calculator helps streamline hiring budget assessments, allowing you to identify where your hiring dollars go and to make data-driven adjustments to optimize recruitment spending.
Lowering the cost per hire can lead to significant savings over time. With a well-managed hiring budget, you can reinvest in other areas, attract high-quality candidates, and increase hiring process efficiency.
Yes, Connecteam supports streamlined onboarding, employee referrals, and internal communications—all of which can help optimize hiring budgets by reducing the time and resources needed for each hire.