Why should I include internal recruiter time in cost-per-hire?

Recruiter time is a real cost that most CPH calculations omit because it is not a cash outflow. But at $70,000 per year, a recruiter's loaded cost is approximately $44/hour including overhead. A hire requiring 40 hours of recruiter time costs $1,750 before any external fee. Excluding this understates true CPH and creates a false comparison between in-house and agency hiring.

Are agency fees worth it?

Agency fees (typically 15-25% of first-year salary) are expensive but fast. For a $120,000 role, a 15% agency fee is $18,000 per hire versus $500-$1,000 for a LinkedIn post. The question is whether time-to-fill is a business risk worth that premium. For hard-to-fill engineering or executive roles where a 90-day vacancy costs more than the agency fee in lost productivity, the answer is often yes.

What is the difference between cost per hire and cost per candidate?

Cost per hire (CPH) is total channel spend divided by the number of hires that came from that channel. Cost per candidate (CPC) is total channel spend divided by total candidates sourced from that channel. A channel with a low CPC but low quality of candidates produces high CPH. Tracking both helps identify channels that source at low cost but convert poorly versus channels that source fewer but higher-quality candidates.

What counts as a sourcing channel?

Any path through which you find candidates: job boards (LinkedIn, Indeed, Glassdoor), employee referrals, recruiting agencies, social media, career fairs, university recruiting, direct sourcing by the recruiter, and inbound applications from your career site. Each channel has a different cost structure and conversion rate. Tracking them separately is the only way to optimize spending.

How does the benchmark comparison help?

Comparing your CPH to the SHRM benchmark of $4,700 tells you whether your recruiting function is more or less efficient than average. If you are significantly above benchmark, the channel breakdown shows which channels are driving the excess. If you are below benchmark, you have evidence that your recruiting strategy is cost-efficient, which is valuable for budget defense conversations.

Should I include the cost of a bad hire?

This calculator covers direct recruiting costs only. The cost of a bad hire (reduced productivity, re-recruiting costs, manager time) is typically estimated at 50-200% of the role's annual salary. Some organizations track quality-of-hire metrics separately and weight them into their CPH. This tool gives you a foundation to add those multipliers if your organization tracks quality-of-hire scores.

Cost-per-Hire Calculator

True cost-per-hire by sourcing channel, including recruiter time and SHRM benchmark comparison.

Recruiter annual salary ($)Time on this hire (hours)HR overhead (%)Background check ($)Drug screening ($)Assessment / testing ($)Onboarding ($)Signing bonus ($)

Sourcing channels

Channel	Cost ($)	Hires	Candidates

Total cost per hire

$2,683

vs SHRM benchmark (2023)

-$2,017

Recruiter time: $1,750 ($34/hr) | Fixed: $550 | External: $5,750 | Hires counted: 3

Channel comparison

Channel	CPH	Per candidate	Hire rate
AgencyHighest CPH	$5,000	$625	12.5%
Job board	$600	$15	2.5%
Referral programLowest CPH	$150	$30	20%

Referral program runs $150 per hire vs $5,000 for Agency. Shifting more reqs to Referral program could save about $4,850 per hire on external spend alone.

SHRM benchmark about $4,700 (2023). Industry CPH varies by role level and sector.

Benchmarks are planning references. Your actual CPH varies by role, location, and hiring volume.

How this tool works

Most organizations track only external recruiting spend and call that cost-per-hire. But internal recruiter time is a real cost: at $70,000 per year, a recruiter's time costs approximately $34 per hour. A hire requiring 40 hours of recruiter involvement adds $1,750 in cost before any job board fee or agency commission. This calculator captures both the internal and external components, lets you model multiple sourcing channels with their actual spend and hire counts, and shows you which channel produces hires at the lowest cost so you can shift budget accordingly.

Worked example

Recruiter annual salary: $70,000. Hours on this hire: 40. Overhead rate: 30%. Background check: $50. Onboarding: $500. Signing bonus: $0. Sourcing channels: LinkedIn job post ($500, 1 hire), employee referral ($200, 1 hire), recruiting agency ($18,000, 1 hire). Hourly rate: $33.65. Time cost: $1,750. Fixed costs: $550. Channel CPH: LinkedIn $500, Referral $200, Agency $18,000. Total CPH (3 hires): $7,000 per hire vs SHRM benchmark of $4,700.

Frequently asked questions

Why should I include internal recruiter time in cost-per-hire?
Recruiter time is a real cost that most CPH calculations omit because it is not a cash outflow. But at $70,000 per year, a recruiter's loaded cost is approximately $44/hour including overhead. A hire requiring 40 hours of recruiter time costs $1,750 before any external fee. Excluding this understates true CPH and creates a false comparison between in-house and agency hiring.
Are agency fees worth it?
Agency fees (typically 15-25% of first-year salary) are expensive but fast. For a $120,000 role, a 15% agency fee is $18,000 per hire versus $500-$1,000 for a LinkedIn post. The question is whether time-to-fill is a business risk worth that premium. For hard-to-fill engineering or executive roles where a 90-day vacancy costs more than the agency fee in lost productivity, the answer is often yes.
What is the difference between cost per hire and cost per candidate?
Cost per hire (CPH) is total channel spend divided by the number of hires that came from that channel. Cost per candidate (CPC) is total channel spend divided by total candidates sourced from that channel. A channel with a low CPC but low quality of candidates produces high CPH. Tracking both helps identify channels that source at low cost but convert poorly versus channels that source fewer but higher-quality candidates.
What counts as a sourcing channel?
Any path through which you find candidates: job boards (LinkedIn, Indeed, Glassdoor), employee referrals, recruiting agencies, social media, career fairs, university recruiting, direct sourcing by the recruiter, and inbound applications from your career site. Each channel has a different cost structure and conversion rate. Tracking them separately is the only way to optimize spending.
How does the benchmark comparison help?
Comparing your CPH to the SHRM benchmark of $4,700 tells you whether your recruiting function is more or less efficient than average. If you are significantly above benchmark, the channel breakdown shows which channels are driving the excess. If you are below benchmark, you have evidence that your recruiting strategy is cost-efficient, which is valuable for budget defense conversations.
Should I include the cost of a bad hire?
This calculator covers direct recruiting costs only. The cost of a bad hire (reduced productivity, re-recruiting costs, manager time) is typically estimated at 50-200% of the role's annual salary. Some organizations track quality-of-hire metrics separately and weight them into their CPH. This tool gives you a foundation to add those multipliers if your organization tracks quality-of-hire scores.