Cost per hire

Cost per hire is the honest number for what recruitment costs. It is easy to understate by counting only agency invoices and leaving out your own team's time.

Cost per hire

(Internal + external recruiting costs) / Number of hires.

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How it is calculated

1

Add external costs — job advertising, agency fees, assessments, background verification.

2

Add internal costs — recruiter salaries, referral bonuses, and interviewer time.

3

Divide the total by the number of hires made in the period.

Worked example

₹4,00,000 of total recruiting cost across 10 hires is a cost per hire of ₹40,000.

What to watch for

Frequently asked questions

Should I include recruiter salaries?

Yes. Excluding internal cost is the single biggest reason reported cost per hire looks unrealistically low.

How do I reduce it?

Referrals, a stronger employer brand and a direct-sourcing capability all reduce agency dependence, which is usually the largest external line.

More HR Metrics calculators

There is an easier way to do this each month.

Garuda HR looks after payroll, attendance, leave and statutory compliance for Indian teams — the same arithmetic, run for you every month, with a full audit trail. We would be glad to show you around.