**Cost of Hire**

This measurement uses external costs and internal costs to determine the overall

cost per person hired during any given time period. This formula looks at the number

of hires and the costs to obtain them. It enables us to derive expenses for each new hire

stated as an average.

**Cost per Hire** = (S (**External Costs**) + S (**Internal Costs**))

(**Total Number of Hires in a Time Period**)

External costs are those expenses such as external agency fees, advertising costs, job fair

costs, travel costs, and other similar expenses for the time period being analyzed. Internal

costs are expenses that can include fully loaded salary and benefits of the recruiting team

and fixed costs such as physical infrastructure.

**Cost per Hire** = ((External Costs = $100,000) + (Internal Costs = $100,000))

(Total Number of Hires in Time Period = 50)

Cost per Hire = **$4,000**

Cost per Hire Internal/Comparable Determining the internal cost per hire uses the

same formula but includes only internal costs in the formula numerator. It is possible to

compute an external cost per hire and compare the two results.

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