To simplify and ease the Cost per hire (CPH) calculations for companies, professionals and HR executives, this Cost per Hire calculator excel template can be helpful. Simply, add your details and it will automatically calculate the Cost per Hire for you.
This template covers the overall direct and indirect cost components while computing cost per hire. It is good to track the cost of hiring an employee as a best HR practice.
What is Cost Per Hire (CPH)?
According to Talentlyft, Cost-per-hire measures how much it costs a company to fill an open job position. It includes all the costs pertaining to filling a position, such as advertising expenses, recruiting events costs, recruitment software fees, relocation expenses, etc.
Having said that, the cost per hire, i.e. CPH, varies according to the size of the organization, recruitment channels, the seniority of the position, etc.
For more details, refer a wonder blog post by x0pa on Cost per hire.
Best practice to compute cost per hire
According to an American National Standard for calculating cost-per-hire, in order to calculate the average cost-per-hire, you should follow 2 steps:
- Add up all the costs of hire (internal and external)
- Divide that sum by the number of hires in a certain time frame
Simply put,
Cost-Per-Hire (CPH) = (internal recruiting cost + external recruiting cost)/ total no of hires in a given time frame.
What is good cost per hire amount ?
A recent survey by the Society of Human Resource Management (SHRM) found that the average cost per hire is just over $4,000. This number is the average across all the companies SHRM surveyed. Source – Workable
However, this survey is not a final verdict. Companies and HR managers can put a threshold to CPH as per their company policy.
Constituents of Cost per hire
Internal recruiting costs are expenses related to internal staff and organizational costs of the recruitment function. These include:
- Recruiter salaries
- Employee referral bonuses
- Interview costs (# of hours X hourly salary of interviewer or hiring manager)
- Fixed costs such as physical infrastructure (e.g., office rental)
External recruiting costs are expenses related to external vendors or out-of-office costs including:
- Agency fees
- Advertising costs (e.g., job boards)
- Technology costs (e.g., recruiting software)
- Career fair / recruiting event costs
Download and use Cost per hire calculator excel template
To use this free cost per hire calculator excel template, you should have Microsoft Office/ Microsoft Excel installed in your system.
After installing Excel or Spreadsheet, download the zip file of this template, extract the template using WinRAR or 7Zip decompressing software.
Once extracted, you can open the file using Excel and start entering data or customizing the template. You can customize the currency, color scheme, fields in this template as per your requirement.
