The Cost Per Hire Calculator is a tool that helps companies calculate the expenses associated with filling an open position. It takes into account various costs such as advertising, recruiting, and staffing expenses.
The Cost Per Hire, or CPH, is the total amount of money spent on recruiting new employees divided by the number of recruits. It is a widely used HR metric that helps measure the effectiveness of the recruitment process. A low CPH is desirable, but it is also important to maintain the quality of recruits. The CPH may vary based on factors such as the size of the organization, the seniority of the position, and the recruitment channels used.
How to calculate cost per hire?
Cost per hire (CPH) is a metric that represents the total expenses incurred by an employer to fill an open position. It is calculated by dividing the sum of all direct and indirect recruiting costs by the number of candidates recruited.
To calculate CPH, follow these steps:
- Identify the direct and indirect expenses associated with recruiting and staffing: Direct expenses are costs that are directly related to the recruitment process, such as salaries of recruiting staff, candidate background checks, and reference checks. Indirect expenses are costs that are not directly related to the recruitment process, but are incurred as a result of it, such as recruiter fees, advertising costs, and career fair expenses.
- Calculate the total direct and indirect expenses: Add up all of the direct and indirect expenses associated with recruiting and staffing to determine the total cost.
- Divide the total cost by the number of candidates recruited: To get the CPH, divide the total cost by the number of candidates recruited.
CPH = (Direct expenses + Indirect expenses) / Number of candidates recruited
For example, if the total direct and indirect expenses associated with recruiting and staffing for a particular position are $5,000, and the number of candidates recruited is 10, the CPH would be $500 ($5,000 / 10 candidates).
To assist with CPH calculations, a Cost Per Hire Calculator Excel template has been created. It consists of seven sections: a header, a summary section, advertising costs, reviewing costs, interviewing costs, joining costs, and miscellaneous costs. Simply enter the relevant details and the template will automatically calculate the CPH for you.
