How do companies accurately calculate cost per hire?

[Atticus]

Recruitment costs can vary widely depending on tools, agencies, and hiring channels. What expenses should be included when calculating cost per hire? Are there benchmarks your company follows?

 

[Henry]

Companies calculate cost per hire by dividing total recruitment expenses—including advertising, recruiter salaries, software, onboarding, referrals, and interview costs—by the number of hires made during a specific hiring period.

 

[Sanji]

Most companies calculate cost per hire by adding up all recruiting expenses and dividing by the number of hires made in a given period. This usually includes job ads, recruiter salaries, agency fees, interview costs, background checks, referral bonuses, and onboarding expenses. The formula is simple: Total hiring costs ÷ Total number of hires = Cost per hire. In my experience, companies get more accurate numbers when they track both obvious and hidden costs instead of just recruitment ads or agency fees.