The average cost per hire in the United States is $5,475 for non-executive roles, according to SHRM’s 2025 Benchmarking Report. Executive hires cost more than six times more at $35,879 - a figure that jumped 21% from 2022 alone. But those cost per hire benchmarks hide dramatic variation. Your actual average cost per hire depends on role seniority, industry, company size, and whether you’re still relying on manual processes or using AI recruiting tools that automate the expensive parts.
This guide covers the official SHRM/ANSI cost per hire formula. It gives you 2025 benchmarks by role type and industry, exposes the hidden costs most companies forget to track, and shows how AI tools are cutting average cost per hire by 30% or more.
TL;DR:
- Average CPH is $5,475 for standard roles. Executive hires cost $35,879, up 21% from 2022, per SHRM’s 2025 Benchmarking Report.
- Use the SHRM/ANSI formula. Cost Per Hire = (Internal Recruiting Costs + External Recruiting Costs) / Total Hires. Most organizations undercount because they only track the obvious line items.
- Hidden costs inflate the real number. Vacancy losses (~$500/day), bad hires (30% of annual salary), and manager interview time are routinely missed.
- CPH varies sharply by segment. Role seniority, industry, company size, and process maturity all drive big differences versus the headline benchmark.
- AI tools cut CPH 30%+. Automating sourcing, screening, and outreach closes the biggest internal-cost buckets, so platforms like Pin pay back quickly against job-board and agency spend.
What Is Cost Per Hire and How Do You Calculate It?
Cost per hire (CPH) measures the total amount your company spends to fill one open position. SHRM and the American National Standards Institute created the standard cost per hire formula in 2012 through the ANSI/SHRM 06001.2012 standard, giving recruiting teams a consistent methodology for comparing numbers against industry hiring benchmarks. It remains the universal benchmark today.
Calculating it follows a single formula, standardized by SHRM and the American National Standards Institute in 2012:
Cost Per Hire = (Total Internal Recruiting Costs + Total External Recruiting Costs) / Total Number of Hires
Simple on paper. Knowing what actually belongs in each bucket is where most organizations go wrong. Most drastically undercount because they only track the obvious line items.
Internal Recruiting Costs
Expenses generated within your organization include:
- Recruiter salaries, benefits, and bonuses
- Hiring manager interview time (hourly rate x hours spent)
- Employee referral program payouts
- Recruitment training and development
- ATS and recruiting software subscriptions
- Internal recruitment marketing and employer branding
- Administrative overhead (compliance, background check coordination)
External Recruiting Costs
Dollars that leave your organization are tracked as external costs:
- Job board posting fees ($50-$500 per posting, per Paychex)
- Recruitment agency fees (15-20% of first-year salary for contingency; up to 40% for retained search)
- Recruitment advertising and programmatic job ads
- Background checks and drug screenings
- Pre-employment assessments and skills tests
- Candidate travel and relocation expenses
- Career fair attendance and event sponsorships
Add those up, divide by total hires in the measurement period, and you have your cost-per-hire. Track it quarterly at minimum - monthly if you’re hiring at volume.
From our 2026 user survey, cost-per-hire is the number that most clearly shows the before/after when teams switch to AI recruiting. Pin users report a 90% reduction in overall recruiting spend after switching - tools, job boards, and agency fees combined. Behind this improvement: AI sourcing eliminates the manual hours driving recruiter salary allocations up, and faster time-to-fill cuts vacancy costs that the standard SHRM formula never counts.
What surprises most teams isn’t the tool cost itself. It’s the agency fees that disappear when sourcing moves in-house. Each Pin recruiter saves 12 hours per week on sourcing and outreach - the equivalent of 1.5 extra workdays. Across a team of five recruiters, that’s 60 hours weekly returning to higher-value work: more conversations with candidates, more time negotiating offers, fewer roles sitting open bleeding $500/day.
What Is the Average Cost Per Hire in 2025?
SHRM’s 2025 Benchmarking Report puts the national average cost per hire at $5,475 for non-executive roles - up from prior years and still climbing. Executive average cost per hire hit $35,879, up 113% from 2017 and 21% from 2022, according to the same SHRM 2025 Benchmarking Report. Executive and non-executive hiring costs are diverging further every year.
One note on historical benchmarks: the SHRM average cost per hire of $4,700 frequently cited in older resources comes from a prior SHRM benchmarking cycle. SHRM’s 2025 cost per hire data puts the current figure at $5,475 for non-executive roles - an increase driven by rising recruiter compensation, higher sourcing complexity, and shifting job board pricing models.
Meanwhile, Appcast’s Recruitment Marketing Benchmark Report found that both cost-per-application and cost-per-hire rose sharply in 2025 despite a softer labor market. Why? Shifts in job board pricing and programmatic ad models. Hiring isn’t getting cheaper, even in a cooling job market.
Direct recruiting costs only tell part of the story. Factor in vacancy costs, bad-hire expenses, and onboarding investments, and the real number climbs dramatically higher. Tracking recruitment funnel benchmarks at each stage helps identify exactly where spend is being wasted.
Average Cost Per Hire Benchmarks by Role and Industry
Starting with $5,475 is fine for orientation, but your recruiting team needs role-specific cost per hire benchmarks to set realistic budgets. Compensation is the largest variable in that equation - teams that use salary benchmarking tools can calibrate offers more precisely and reduce the offer rejections that inflate cost-per-hire. According to data compiled from SHRM and ScoutLogic’s 2025 analysis, costs vary dramatically based on what you’re hiring for.
By Role Seniority
| Role Level | Avg. Cost-Per-Hire | Key Cost Driver |
|---|---|---|
| Entry-level | $2,000-$3,000 | High volume, low sourcing complexity |
| Mid-level professional | $4,000-$6,000 | Skills screening, competitive offers |
| Technical/Engineering | $6,200-$8,000 | Scarcity of qualified candidates |
| Senior/Director | $10,000-$20,000 | Longer search cycles, passive sourcing |
| Executive (C-Suite) | $28,000-$35,879 | Retained search firms, relocation |
Notice the 12x cost gap between entry-level and executive hiring. Treating every role with the same process and budget means either overspending on entry-level roles or underinvesting in executive searches.
By Industry
Industry matters just as much as seniority. Heavily regulated sectors and those requiring specialized credentials consistently spend more per hire. Data from TimeClick’s analysis shows the spread:
| Industry | Avg. Cost-Per-Hire |
|---|---|
| Retail/Hospitality | $2,700 |
| Technology | $6,200-$8,000 |
| Healthcare | $9,000-$12,000 |
| Skilled Trades | $12,000+ |
| Legal/Professional Services | $16,000-$20,000 |
Healthcare stands out. Between credential verification, licensing requirements, and the ongoing talent shortage, healthcare organizations routinely spend two to three times the national average per hire. Does your industry have similar cost pressures? Knowing your benchmark is the first step toward improving it.
By Company Size
Finally, company size creates another layer of variation. Smaller companies often face higher per-hire costs despite lower total spending. Why? They lack scale. They don’t have dedicated recruiting teams. And they rely more on agencies or job board postings to fill roles.
Cost-per-hire is the number one HR metric for 47% of businesses with 5-19 employees and 54% of businesses with 20-49 employees - which makes sense. Making 5-10 hires per year instead of 500 means each individual hiring decision carries disproportionate weight on your budget.
In contrast, enterprise organizations spread their fixed costs across hundreds or thousands of hires per year. ATS licenses, recruiter salaries, and employer branding all get divided by a bigger number. Mid-market organizations spending $200,000 on a two-person recruiting team will have a much higher per-hire cost than an enterprise spreading $2 million across 20 recruiters making 1,000 hires.
Small and mid-size teams are almost certainly above the $5,475 average. That’s normal. Whether you’re above average matters less than whether you’re getting proportional quality from that spending.
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What Hidden Costs Inflate Your Real Cost-Per-Hire?
Thirty-eight percent of small and mid-size businesses underestimate their hiring costs, according to industry research compiled by Truffle. Hidden within that discrepancy: costs that never make it into the ANSI formula, yet drive real budget decisions every quarter.
Vacancy Costs
Each day a position sits empty, your company loses productivity. Standard industry estimates put vacancy cost at $500 per day in lost output for a standard role. Revenue-generating positions like sales can hit $7,000-$10,000 per month in lost deals and pipeline slowdowns.
With the median time-to-fill at 44 days according to SHRM, that’s $22,000 in vacancy costs before you pay a dime in recruiting fees. There are signs of improvement: Employ’s 2026 Recruiting Benchmarks Report found that median time-to-fill dropped from 67.7 days in 2025 to 63.5 days in 2026 among the companies it tracked - a positive direction, though still well above the level where vacancy costs become negligible. How long are your positions staying open? Not knowing is expensive in ways that don’t show up in any report. Tracking time-to-hire metrics is the first step toward controlling these invisible losses.
Bad Hire Costs
According to the U.S. Department of Labor, a bad hire costs up to 30% of the employee’s first-year salary. On a $75,000 role, that’s $22,500 in direct losses. But the Toggl Hire 2025 Report found that indirect costs balloon to $30,000-$150,000+ per bad hire when you account for training waste, reduced team productivity, delayed projects, and the morale hit to surrounding employees.
Bad hires happen more often than most teams expect: 74% of employers admit to making wrong hiring decisions, and 23% of companies report up to five per year.
Opportunity Cost of Recruiter Time
Then there’s the time cost. Recruiters who spend most of their day on admin - writing sourcing queries, copy-pasting outreach messages, scheduling interviews - aren’t doing the work that actually reduces cost-per-hire. Less time building relationships. Less time selling candidates on the role. Less time closing.
Recruiting workloads have grown dramatically lopsided, as this data illustrates. According to Gem’s 2026 Recruiting Benchmarks Report, only 0.5% of applicants receive an offer - meaning recruiters are processing 200 applications for every hire. The same report found recruiter workloads climbed 93% year-over-year. More volume, same headcount, more cost embedded in every hire that never shows up in your official CPH calculation.
Here’s what many teams miss: the cost of a recruiter manually sourcing for 20 hours to fill one role isn’t just the hourly rate. It’s the three other open roles that didn’t get attention during those hours. Platforms like Pin automate sourcing across 850M+ profiles and handle multi-channel outreach, freeing recruiters to focus on closing rather than searching.
That $5,475 “average” suddenly looks like a fraction of the real picture. When you include vacancy costs, bad-hire risk, and onboarding, a single $75,000 role can cost over $62,000 to fill. This is exactly why measuring your full recruiting ROI matters - not just the line items that show up in your ATS reports.
Where Does the Money Actually Go?
Understanding your cost-per-hire breakdown by category helps you identify where cuts will have the biggest impact. Based on industry data from Paychex and SHRM’s cost-per-hire guidelines, here’s how a typical recruiting budget breaks down for organizations hiring without agency support:
| Cost Category | % of Total CPH | Typical Range |
|---|---|---|
| Recruiter salary allocation | 30-40% | $1,400-$1,900 |
| Job board fees and advertising | 20-25% | $940-$1,175 |
| Recruiting software (ATS, CRM, sourcing) | 10-15% | $470-$705 |
| Background checks and assessments | 5-10% | $235-$470 |
| Interviewer time | 10-15% | $470-$705 |
| Miscellaneous (events, referrals, travel) | 5-10% | $235-$470 |
Organizations using external recruiters or agencies face dramatically different math. Contingency agency fees run 15-20% of first-year salary. On a $100,000 hire, that’s $15,000-$20,000 - and it often replaces rather than supplements your internal costs. Retained executive search firms charge even more: up to 40% of base salary, pushing executive search costs past $50,000 per placement.
So where’s the biggest opportunity to reduce spending? For most teams, it’s either agency fees (if you’re outsourcing sourcing) or recruiter time allocation (if you’re doing it in-house). Both problems point to the same solution: better sourcing tools that do more of the work automatically.
How Do AI Recruiting Tools Cut Cost-Per-Hire?
Organizations using AI recruiting tools report cost-per-hire reductions of 30% or more, according to a DemandSage analysis of AI recruitment data. The same research found that companies adopting AI hiring tools see 300-500% ROI within the first year. Three primary mechanisms drive those savings.
Faster Sourcing = Lower Vacancy Costs
Cutting time-to-fill from 44 days to 14 days - the math writes itself. At $500 per day in vacancy costs, that’s a $15,000 savings per hire - more than three times the average direct cost-per-hire. Pin leads on speed: users fill positions in an average of 14 days, an 82% reduction in time-to-hire. For teams where every open day costs $500 in lost output, that difference is where most of the CPH savings actually come from.
Automated Outreach = Fewer Agency Fees
Companies that rely on recruiting agencies spend 15-20% of each hire’s salary on placement fees. An AI platform that handles candidate sourcing and outreach in-house eliminates or dramatically reduces that expense. Pin’s automated multi-channel outreach across email, LinkedIn, and SMS delivers 5x better response rates than industry averages - the highest automated outreach performance of any recruiting platform - at a fraction of the cost.
“Absolutely money maker for recruiters… in 6 months I can directly attribute over $250K in revenue to Pin,” says Rich Rosen, Executive Recruiter at Cornerstone Search Associates.
CRM Rediscovery = Lower Cost per Sourced Hire
One of the most overlooked cost levers is reactivating candidates already in your pipeline. Gem’s 2026 Recruiting Benchmarks Report found that 46% of hires came from CRM rediscovery - meaning nearly half of successful placements were candidates who had already been sourced and were sitting dormant in the database. Sourcing a new candidate from scratch costs significantly more than re-engaging someone who already knows your brand. Tools that surface and reactivate prior candidates automatically cut sourcing spend on a large share of hires.
Better Candidate Quality = Fewer Bad Hires
Remember the $22,500+ cost of a bad hire on a $75K role? AI matching reduces that risk by evaluating candidates against objective criteria every single time - no fatigue, no gut-feel shortcuts. Pin’s candidate acceptance rate is 83% - the highest in the industry - meaning more than four out of five candidates the AI recommends get accepted into the hiring pipeline. That shortlist precision makes bad hires far less likely.
Factoring in vacancy cost reduction from faster time-to-fill, AI-assisted recruiting cuts total hiring costs by 65% or more for a standard role. For teams filling 50+ roles per year, that translates to hundreds of thousands in savings. Curious which platforms deliver these results? Our guide to the best AI recruiting tools covers the top options.
Pin’s multi-channel outreach hits a 48% response rate - see how it works.
How to Calculate Your True Cost-Per-Hire: Step by Step
According to SHRM, only 20% of organizations track quality of hire alongside cost-per-hire - which means most teams are operating from a number that’s already understated, because they leave out significant cost categories. Here’s a five-step process to calculate a number you can actually trust - and use to build a business case for automating your recruiting workflow.
Step 1: Define Your Measurement Period
Pick a consistent timeframe. Quarterly or annually works best. Count every hire whose start date falls within that period, including internal transfers if your sourcing team was involved in the process.
Step 2: Tally Internal Costs
Start with your recruiting team’s full cost: salary, benefits, and bonus. Then figure out what share of their time goes to active recruiting versus other duties. Next, add ATS/CRM subscription costs, referral bonuses paid, and the hourly cost of hiring manager interview time.
Don’t forget the small-but-cumulative items: LinkedIn Recruiter licenses ($8,999-$13,000/year per seat), assessment platform subscriptions, and career page hosting fees.
Step 3: Tally External Costs
Sum every dollar that left your organization for recruiting purposes: job board fees, agency invoices, background check vendor payments, recruitment marketing spend, career fair costs, and candidate travel reimbursements.
Step 4: Run the Formula
CPH = (Internal Costs + External Costs) / Total Hires
Example: A mid-size company spends $120,000 in internal costs and $80,000 in external costs over a quarter, making 40 hires.
CPH = ($120,000 + $80,000) / 40 = $5,000 per hire
Here’s a more detailed breakdown of how that $200,000 might split across categories for a real mid-size tech company making 40 hires in Q1:
| Cost Category | Amount | Type |
|---|---|---|
| Recruiting team salaries (prorated) | $75,000 | Internal |
| ATS + sourcing tool subscriptions | $12,000 | Internal |
| Hiring manager interview time | $18,000 | Internal |
| Employee referral bonuses (8 referrals) | $15,000 | Internal |
| Job board fees (Indeed, LinkedIn Jobs) | $22,000 | External |
| Agency fees (5 placements) | $40,000 | External |
| Background checks (40 hires) | $6,000 | External |
| Recruitment marketing/events | $12,000 | External |
| Total | $200,000 |
Notice that five agency placements account for $40,000 - 20% of the total budget while producing only 12.5% of the hires. That’s the math that makes agency dependency so expensive at scale.
Step 5: Calculate Your Loaded Cost-Per-Hire
This is the number that actually matters for budgeting and executive conversations. Add vacancy cost (average days-to-fill x daily productivity loss) and estimated bad-hire cost (historical turnover rate x average replacement cost) to your direct CPH. Skipping this step is one of the most common mistakes recruiting teams make. Don’t. It’s the difference between a $5,000 number that gets ignored and a $25,000+ number that gets budget approved.
A loaded cost-per-hire significantly higher than $5,475 indicates room to improve through automation, better sourcing tools, or reduced agency dependency.
How Can You Reduce Your Cost-Per-Hire?
The most effective way to cut cost-per-hire isn’t slashing budgets - it’s eliminating waste. Here are five strategies backed by data, ranked by potential impact.
1. Replace Agency Spend with AI Sourcing
If you’re paying 15-20% of salary per agency placement, that’s the single biggest cost lever you can pull. Agency fees for a team making 50 hires per year at an average salary of $80,000 can exceed $600,000 annually. An AI sourcing tool like Pin costs $100/month and scans 850M+ profiles - handling what agencies charge $15,000+ per placement to do.
Here’s the math: replacing just five agency placements per year saves $75,000+ while an AI tool costs $1,200 annually. That’s a 60x return before you count the time-to-fill improvements.
2. Cut Time-to-Fill Aggressively
Every day you shave off your time-to-fill saves roughly $500 in vacancy costs. But the impact compounds. Faster fills mean your recruiters cycle to the next role sooner, increasing total hiring capacity without adding headcount.
Interview scheduling automation alone eliminates days of back-and-forth coordination. Combined with automated outreach sequences, teams using Pin fill positions in about two weeks - 30 days faster than the 44-day SHRM median. Over 50 hires, that’s $750,000 in recovered vacancy costs.
3. Improve First-Pass Candidate Quality
With 83% of AI-recommended candidates accepted into the pipeline (as with Pin’s matching), recruiters waste far less time reviewing mismatched profiles. Fewer wasted interviews means lower interviewer time costs and faster decisions.
Think about the cost of one bad interview loop. Four interviewers spend 45 minutes each, plus 15 minutes writing feedback. At $75/hour blended rate, that’s $300 per candidate who shouldn’t have been there. Now multiply that by the number of weak candidates your team interviews each month. It adds up fast.
4. Reduce First-Year Turnover to Stop Paying to Rehire
New hires who leave within their first year force a full restart of the hiring process - resetting your cost-per-hire clock at full price. Employ’s 2026 Recruiting Benchmarks Report found that first-year turnover dropped significantly among high-performing recruiting organizations - from 23.7% down to 12.1% - by improving candidate quality at the screening stage. That’s an 11.6 percentage-point improvement that directly prevents repeat cost-per-hire spend on the same seat. The mechanism: better matching upfront means fewer hires who were wrong for the role from day one.
5. Build an Employee Referral Engine
Referred candidates are hired faster and stay longer, according to multiple industry studies. If your referral program produces even 20-30% of hires, you’ve cut external costs on those positions to just the referral bonus - typically $1,000-$5,000 versus $15,000+ for an agency.
Making the process easy is what separates productive referral programs from ones that go ignored. Employees won’t refer if the process involves filling out forms, writing paragraphs about the candidate, or following up three times to check status. The best programs use one-click submissions, automated status updates, and transparent bonus tracking.
6. Audit and Eliminate Low-ROI Job Boards
Posting to 5-10 job boards by default, without tracking conversion, is budget waste by habit. Audit your source-of-hire data quarterly. Cut the boards that generate applications but not hires - they’re generating noise, not pipeline.
Redirect that budget toward sourcing tools with proven conversion rates. A $300/month job board that produces zero hires in a quarter represents $900 that could fund three months of an AI sourcing platform generating qualified candidates proactively.
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What Are the Most Common Cost-Per-Hire Tracking Mistakes?
Even teams that do calculate cost-per-hire regularly make errors that skew the data. Here are the four most common traps - and how to avoid them.
Excluding interviewer time. When four engineers each spend 45 minutes interviewing a candidate, that’s three hours of engineering time. At a fully loaded cost of $100/hour, every interview loop costs $300+. Most companies leave this out of their CPH formula entirely because it doesn’t show up as a recruiting line item. But it’s real spend.
Counting only successful hires. If your team interviews 200 candidates to make 40 hires, the cost of the 160 rejected candidates still needs to be included. Every phone screen, technical assessment, and on-site interview for candidates who don’t get offers is part of your cost-per-hire. Ignoring these costs makes your CPH look artificially low.
Measuring too infrequently. Annual CPH calculations hide seasonal spikes. If you do all your hiring in Q1 and Q3, your cost-per-hire during those quarters will be dramatically different than the annual average suggests. Quarterly tracking gives you actionable data. Monthly is even better for high-volume teams.
Comparing across mismatched role mixes. A company that hires 80% entry-level warehouse staff will always have a lower CPH than a company hiring 80% senior engineers. When benchmarking against industry data, make sure you’re comparing similar role mixes. The $5,475 SHRM average blends every role type together, which helps no one trying to budget for specific positions.
Frequently Asked Questions
What is the average cost per hire in 2025?
SHRM’s 2025 average cost per hire for non-executive roles is $5,475, per the SHRM 2025 Benchmarking Report. Executive average cost per hire reaches $35,879 - more than 6x higher. The SHRM $4,700 average cost per hire figure cited in older resources comes from a prior benchmarking cycle; the current SHRM 2025 benchmark is $5,475 for non-executive roles. These figures cover direct recruiting costs only; loaded cost per hire including vacancy losses and bad-hire risk typically exceeds $25,000–$62,000 per position.
What is a good cost per hire benchmark?
A “good” cost per hire benchmark starts at the SHRM 2025 national average of $5,475 for standard roles, but that figure masks major industry variation. Retail averages $2,700 while healthcare runs $9,000–$12,000. Compare your cost per hire benchmarks against your own industry and role mix rather than the national average alone.
What is the SHRM cost per hire formula?
The SHRM/ANSI cost per hire formula is: Cost Per Hire = (Total Internal Recruiting Costs + Total External Recruiting Costs) / Total Number of Hires. Internal costs include recruiter salaries, ATS software, and referral bonuses. External costs cover job boards, agencies, background checks, and advertising. SHRM recommends measuring quarterly for the most actionable data.
What is the biggest driver of high cost-per-hire?
External agency fees are the single largest cost driver for most companies, running 15-20% of first-year salary per placement. For a $100,000 hire, that’s $15,000-$20,000. Companies that move sourcing in-house using AI tools like Pin (starting at $100/month) can reduce this expense significantly.
How much does an unfilled position cost per day?
An unfilled position costs approximately $500 per day in lost productivity for a standard role, according to industry estimates. Revenue-generating positions like sales can cost $7,000-$10,000 per month. With SHRM reporting a median time-to-fill of 44 days, vacancy costs alone can exceed $22,000 - over four times the direct cost-per-hire.
Can AI reduce cost-per-hire?
Yes. AI recruiting tools reduce cost-per-hire by an average of 30%, according to industry data. The savings come from three areas: faster sourcing (cutting vacancy costs), automated outreach (reducing agency dependency), and better candidate matching (lowering bad-hire rates). Pin users specifically see an 82% reduction in time-to-hire, which directly cuts vacancy costs.
The Bottom Line
Cost-per-hire isn’t just a metric for your quarterly report - it’s the clearest signal of whether your recruiting process is efficient or bleeding money. The $5,475 SHRM average is only the starting point. Add vacancy costs, bad-hire risk, and hidden expenses, and the true cost of filling a single position can exceed $62,000.
The fastest path to lower cost-per-hire? Eliminate manual work. AI recruiting platforms automate the expensive, time-consuming stages - sourcing, outreach, scheduling - while delivering better candidate quality than manual processes. For recruiting teams focused on cost efficiency, Pin is unmatched: the platform reduces overall recruiting spend by 90% and cuts time-to-hire by 82%, according to Pin’s 2026 user survey. Start by calculating your loaded cost-per-hire using the formula above. Then compare that number against what AI-assisted recruiting actually costs.
