Cost-per-Hire

(CPH)

Glossary of HR Terms What is Cost-per-Hire (CPH)

What is CPH?

Cost-per-Hire (CPH) is a recruiting metric that calculates the total expenses associated with hiring a new employee. It includes both internal costs (such as recruiter salaries and technology) and external costs (such as job board postings, recruitment agencies, and advertising), divided by the number of hires made in a given period.

Why it matters

Cost-per-Hire helps organizations measure the efficiency of their recruitment process and optimize budgets. A high CPH may indicate inefficiencies, over-reliance on costly external resources, or challenges in the hiring funnel. Tracking this metric ensures that companies balance cost with quality-of-hire and make data-driven talent acquisition decisions.

Where it fits in the HR stack

Cost-per-Hire sits within the talent acquisition analytics and workforce planning layer of the HR stack. It is often tracked in ATS platforms, recruiting analytics dashboards, and HRIS systems. It can also be linked with financial systems to provide a comprehensive view of recruiting ROI.

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Common use cases/Examples

  • Measuring the impact of switching from external recruiters to in-house sourcing.
  • Comparing CPH across departments, job levels, or geographies.
  • Benchmarking recruiting efficiency against industry standards.
  • Evaluating whether new recruiting technologies (such as AI sourcing tools) lower costs.
  • Supporting workforce planning by forecasting the budget needed for future hiring goals.

Examples of companies that use it:

  • Enterprises like IBM and Deloitte, which closely monitor CPH across global offices to optimize large-scale hiring operations.
  • Tech companies such as Google or Meta, which analyze recruiting costs to balance efficiency with attracting niche technical talent.
  • SMBs and startups tracking CPH through ATS platforms like Greenhouse, Lever, or Workable to manage tight recruiting budgets.

FAQ

CPH = (Internal Recruiting Costs + External Recruiting Costs) ÷ Number of Hires in a given period.

Recruiter salaries, referral bonuses, technology tools (ATS, CRM), and in-house recruiting events.

Job board fees, agency fees, background checks, advertising, and travel or relocation expenses.

It varies by industry and role type. For example, entry-level retail hires may cost under $1,000 per hire, while executive-level roles can exceed $10,000.

Not necessarily. Reducing costs without maintaining or improving quality-of-hire can hurt long-term performance and retention. The goal is balance.