Cost per hire calculator (UK recruitment spend)
What you spend to fill a role, divided by the roles you filled. This is your recruitment spend - if you want the cost of employing someone once they start, that is a different sum.
Your recruitment spend
Cost per hire = (external recruiting costs + internal recruiting costs) ÷ number of hires. Internal time is the line most employers leave out, and it is usually the second biggest. This measures the cost of recruiting; for what a person costs once employed, use the true cost of an employee calculator.
Cost per hire = all recruiting costs, internal and external, divided by the number of hires in the same period. Six hires costing £10,800 in agency fees, advertising and tools plus £3,024 of internal time works out at £2,304 a hire. The internal time is the line most people omit, and leaving it out flatters the number by a third or more.
What should be included?
| Include | Leave out |
|---|---|
| Agency and recruiter fees | The new starter's salary |
| Job board and advertising spend | Employer NI and pension |
| ATS and assessment tools | Equipment and software for the role |
| Background and right-to-work checks | Training after they start |
| Interviewer and hiring manager time | Lost productivity while the seat was empty |
| Referral bonuses paid | Onboarding time |
The right-hand column is not unimportant - it is simply a different measure. Mixing the two produces a number that means nothing to anybody.
Cost per hire, or cost of an employee?
These get conflated constantly, and they answer different questions:
- Cost per hire - what did recruiting cost? A recruitment efficiency measure. Falls when you hire more cheaply.
- True cost of an employee - what does this person cost to employ? A budgeting measure: salary plus employer NI at 15% above £5,000, plus pension.
If you are answering "can we afford this hire?", you want the second. If you are answering "is our hiring getting more expensive?", you want this page.
Why is internal time worth counting?
Because it is the cost you can actually change. Agency fees are visible and negotiated once; interviewer hours are invisible and recur on every role. Eighteen hours across screening, three interview stages and the admin is not unusual - at a blended £28 an hour that is £504 a hire before anyone has posted an advert.
Track it and the improvements suggest themselves: fewer interview stages, better screening earlier, a structured scorecard so a decision does not need a fourth conversation.
What drags the number up?
- Agency reliance. One placement fee can outweigh a year of job board spend.
- Rehiring the same role. An early leaver means paying twice - which is why cost per hire should be read next to turnover, not alone.
- Slow decisions. Long processes lose the good candidates and restart the spend.
- Vague briefs. Interviewing to work out what you want is the most expensive way to find out.
And once someone accepts, the clock starts on the part that decides whether the spend was worth it: the onboarding checklist and the paperwork before their first payday.
Why is this lower than "it costs £15,000 to replace someone"?
Because that figure answers a third question. Replacement cost - the £10,000-£20,000 rule of thumb quoted on our staff turnover calculator - includes everything losing a person costs you: the recruitment spend on this page, plus onboarding, plus the months of reduced output before a new starter is fully productive, plus the handover the leaver never quite finished.
Three related numbers, three different jobs:
- Cost per hire - what recruiting costs. Use it to judge your hiring process.
- Replacement cost - what losing someone costs. Use it to justify retention work.
- Cost of an employee - what employing someone costs. Use it to set a budget.
What is a good cost per hire?
There is no credible UK benchmark, and be sceptical of pages that quote one - the figure moves entirely with how much you use agencies and whether internal time is counted at all. A business hiring warehouse staff through job boards and a business hiring engineers through a headhunter are not comparable, and neither is your own number this year against a benchmark built from a differently-defined survey.
The comparison worth making is against yourself: same definition, same inclusions, tracked quarter on quarter. A number that is drifting up while headcount growth is flat is telling you something. A number that sits below somebody else's benchmark is telling you nothing.
This calculator applies the statutory rules as published and shows its working, but it cannot know your contracts, your policies or anything unusual about the case. Treat the figure as a starting point, and take advice on anything contested or expensive.
Know what hiring costs you
CoDash tracks vacancies, applicants and starters alongside turnover and tenure - so cost per hire is a number you can look up rather than reconstruct from invoices.