How To Calculate Cost-Per-Hire

Cost-per-hire is arguably the most important metric for talent analytics. When you know your cost-per-hire, you can better determine where to invest your recruiting dollars. These strategic recruiting decisions can potentially save your company money and attract better candidates.

“I know, from my experience studying this marketplace for years, that analytics can be confusing and intimidating,” says Josh Bersin, Industry Analyst and Researcher, Principal and Founder, Bersin by Deloitte. “Let me assure you that with a little education, and some time looking at the examples and fundamentals in this book, you will find it easy, useful and powerful in your job.”

Because so many factors go into recruiting, it can be difficult to calculate an accurate cost-per-hire across your organization. In our Glassdoor eBook, Talent Analytics for Dummies, Glassdoor Special Edition, we share this formula for calculating cost-per-hire.

Here’s How to Calculate Your Cost-per-Hire:

GD US HowToCalculateCPH Infographic

Three Things You Can Do Once You Calculate Cost-per-Hire:

1. Benchmark your company against the overall average and your industry peers.

Download the Bersin by Deloitte Talent Acquisition Factbook for industry benchmarks.

2. Analyze cost-per-hire data by department and position type.

Use this information to determine what factors could lower the cost-per-hire for specific groups.

3. Compare your cost-per-hire against source of hire.

This information gives you a better picture of which job advertising outlets work best. For accuracy in tracking source of hire, we recommend using technology-based tracking features, such as those embedded in an ATS.