Cost Per Hire (CPH) is a key metric used to measure the total expense incurred by an organization to hire a new employee. This includes costs such as advertising expenses, recruitment agency fees, employee referral bonuses, internal recruitment costs, travel and interview expenses, background checks, assessments, and onboarding costs. By dividing the total recruitment costs by the number of hires, organizations can determine their average cost per hire.
Understanding and calculating CPH is crucial for budgeting and planning, assessing recruitment efficiency, and making strategic decisions. According to the Society for Human Resource Management (SHRM), the average cost per hire for companies in the United States is approximately $4,129, reflecting the significant investment required for effective recruitment.
Benefits of Cost Per Hire?
- Helps allocate appropriate budgets for recruitment activities.
- Assesses the efficiency and cost-effectiveness of recruitment processes.
- Enables comparison with industry standards and competitors.
- Guides investments to optimize recruitment efforts and reduce hiring costs.