What Is Cost Per Hire?
Cost per hire is total recruiting cost (internal + external) divided by the number of hires in a period: (internal costs + external costs) ÷ hires. The SHRM benchmark average sits around $4,700, but the figure most teams compute is wrong in one systematic way - it omits interviewer time, which for technical roles is often the single largest cost. Twenty hours of engineer interviews at $80/hour is $1,600 per hire that never appears in the recruiting budget.
What goes into the formula
- External: job boards, agency fees, sourcing tools, assessments, background checks, employer-brand spend.
- Internal: recruiter salaries (prorated), referral bonuses, and - almost always missed - hiring team interview hours.
- Divide by hires in the same period; segment by role family, because a $2,000 support hire and a $15,000 engineering hire average into a meaningless number.
The levers that actually reduce it
- Replace manual screens: $60-80 of staff time per screen becomes an AI interview on plans from $99/month - at 100 screens/month that's thousands back monthly.
- Cut agency dependence with in-house AI sourcing (credits from $49/month vs 20-25% placement fees).
- Shorten time-to-fill: every vacant week has a productivity cost that dwarfs recruiting line items.
- Reduce mis-hires: evidence-based selection beats resume filters, and one avoided mis-hire pays for a year of tooling.
Frequently Asked Questions
What is a good cost per hire?
It varies by role and market: $1,000-3,000 for high-volume hourly roles, $3,000-6,000 for professional roles, $10,000+ for executive search. Trend matters more than the absolute number - compute it consistently (including interview hours) and drive it down without dropping quality of hire.
How do AI interviews change cost per hire?
They attack the hidden majority of the cost: interviewer time. Teams report roughly 90% lower screening cost per candidate versus $60-80 manual screens, plus faster fills and fewer mis-hires from evidence-based shortlists. The ROI calculator on this site computes it for your volume.