Cost-per-hire (CPH) is the standardized recruiting efficiency metric: total recruiting spend divided by the number of hires completed in a given period. The formula is simple: (Total Internal Costs + Total External Costs) ÷ Total Hires = Cost-per-Hire. The SHRM 2025 Benchmarking Report places the non-executive average at $5,475 and executive CPH at $35,879 — up 113% from 2017 for executive roles, reflecting both elevated search firm fees and the growing complexity of senior talent acquisition.
What's Included in Cost-per-Hire
Internal costs include recruiter salaries (prorated to time on hiring), hiring manager interview time (multiply hours by loaded compensation rate), HR coordination, and prorated ATS or recruiting software subscriptions. These are the most commonly underestimated component — most organizations tracking CPH only via invoices miss 30–50% of the true internal cost.
External costs include job board fees, agency and search firm invoices, background screening, skills assessments, and referral bonuses paid. If an agency is used, fees alone run 15–30% of first-year salary depending on role level and seniority — on a $100,000 role, that is $15,000–$30,000 per placement before any internal costs are counted.
What Cost-per-Hire Does Not Include (and Why That Matters)
CPH is a recruiting cost metric, not a total hiring cost metric. Three large cost categories are excluded:
- Vacancy cost: The lost productivity from the role being open. At the SHRM median of 44 days, a $100,000 salary role carries approximately $19,000 in vacancy cost before a single recruiting dollar is spent.
- Onboarding and ramp-up cost: Typically estimated at 30–100% of first-year salary depending on role complexity — the full cost of orientation, training, manager time, and below-par productivity until the new hire is fully effective.
- Bad-hire cost: The U.S. Department of Labor estimates the cost of a bad hire at a minimum of 30% of first-year salary. Gallup research places the total cost of voluntary turnover at 1.5–2× annual salary when full replacement costs are included.
CPH Benchmarks by Company Size and Role Level
Company size significantly affects CPH. Pin's 2026 benchmarking analysis using SHRM data shows: small businesses under 100 employees average $3,500–$5,500 per hire; mid-market companies (100–999 employees) average $2,500–$4,500; enterprise organizations achieve $1,500–$3,500 through volume efficiencies and amortized tooling costs. Entry-level roles run $1,500–$3,000; technical hires run $6,000–$10,000; executive hires average $28,000–$35,000.
How to Reduce Cost-per-Hire
The highest-ROI levers are channel mix and process efficiency. Employee referrals cost approximately $1,000 less per hire than the company average and arrive with higher initial performance and retention. Reducing agency dependency by 10 percentage points on a team making 50 hires per year at a $100,000 average salary can save $150,000 in fees annually. Automating screening and sourcing reduces the internal labor cost per hire — recruiter time on administrative tasks is one of the most overlooked cost drivers in CPH calculations.
UPPER's autonomous sourcing model is designed to reduce both the time and dollar cost of each hire by compressing sourcing-to-shortlist time and shifting recruiter effort from search to decision. Explore the hiring economics of autonomous sourcing →