What is Cost-per-Hire?
Cost-per-hire is a recruitment metric that calculates the total cost of filling a position, including both internal costs (recruiter salaries, hiring manager time, employee referral bonuses) and external costs (job board fees, agency fees, recruitment software, employer branding spend, background checks). The formula is: total recruitment costs divided by the number of hires made in the same period.
Why it matters
Understanding cost-per-hire helps organisations budget for growth and evaluate the ROI of different recruiting channels. If agency fees dominate your cost-per-hire, investing in an employer brand and direct sourcing capability could dramatically reduce costs. If job board spend is high but conversion is low, it may be time to rethink which boards you use. Cost-per-hire is most useful when tracked over time and broken down by source, role type, and department.
How Teamtailor helps
Teamtailor helps reduce cost-per-hire by replacing expensive agency dependency with direct sourcing tools, a high-converting career site, and automated workflows that reduce recruiter time per hire. Built-in analytics track your investment across channels.
