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Cost per hire


Measures the total costs of recruitment process divided by the total number of hires within the same time frame. 



Calculations steps:

  1. choose time frame
  2. identify the total number of hires
  3. identify for each hire the internal and external costs
  4. create a total amount of cost for each of the above categories
  5. add the totals
  6. divide the total costs by the total number of hires


Example of Internal costs:

  • Recruiters salaries
  • Referral bonuses payed
  • Time costs – number of hours of x hourly rate for every employee included in the recruitment process
  • Fixed costs – meeting room rentals etc.
  • Higher salary of the new joiner
  • Other costs like: lunches, travel costs, relocation costs, signing costs, etc. 


Example of External costs:

  • Agency fee
  • Advertising costs
  • Assessment costs
  • Testing costs
  • Job Fairs 


This metric can be used to build cases for giving a raise then to replacing the employee. This kind of situations should be treated with care.

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