£2,500
Average cost per hire UK (junior)
£12,000+
Average cost per hire (senior executive)
20–40%
Possible reduction with ATS
40–60%
Share of HR time
Definition
Cost per hire is an HR indicator measuring the average total cost of a successful hire. It includes all direct costs (adverts, consultants, tools) and indirect costs (team time). Formula: Cost per hire = (Internal costs + External costs) / Number of hires completed.
Identify and Calculate All Costs
Cost per Hire Breakdown
| Category | Cost Items | Example (10 hires/year) |
|---|---|---|
| External costs | Job boards, consultants, adverts, ATS, CV database | £2,000 + £800 (ATS) = £2,800 |
| Internal HR time | Sourcing, CV review, interviews, admin (200h × £25/h) | £5,000 |
| Manager time | Interviews, decisions (100h × £35/h) | £3,500 |
| Candidate costs | Travel reimbursement, accommodation | £300 |
| Onboarding | Equipment, training, setup | £600 |
| TOTAL | All categories | £12,200 = £1,220 per hire |
Calculate and Optimise Your Cost per Hire
- 1
Identify All Costs (Internal + External)
Job boards, ATS, consultants, HR time and manager time valued as hourly rate × hours.
- 2
Value Time Spent
HR time = annual salary / 1,600 hours. Same for managers. Include all time from sourcing to offer.
- 3
Divide by Number of Hires
Over the period analysed (quarter, half-year or year).
- 4
Analyse by Segment
By channel (referral, job board, consultant), role type (junior, senior, executive), duration.
- 5
Optimise Least Efficient Channels
Prioritise referrals and ATS, automate repetitive tasks, upskill managers.
Concrete SME Example (10 hires/year)
ATS subscription £800/year = £80/hire + Job adverts £2,000/year = £200/hire + HR time 200h × £25 = £500/hire + Manager time 100h × £35 = £350/hire = Total: £1,130 per hire. With referrals covering 30% of hires, this cost drops to £850–£950.
What is the average cost per hire in the UK?
Average ranges from £2,500 for junior roles to £12,000+ for senior positions. SMEs tracking this metric reduce costs by 20–40% by optimising channels. Focus on referrals and ATS to lower costs most effectively.
Should manager time be included in cost per hire?
Absolutely. Manager time is often the largest and most underestimated component. A manager earning £50,000/year costs approximately £31/hour. Three interviews of 1 hour each for 20 candidates = 60 hours = £1,860 in manager time alone.
How to reduce cost per hire without sacrificing quality?
Three main levers: develop referral programme (cheapest, highest quality), invest in ATS to automate repetitive tasks, train managers in efficient interviewing. Quality of initial screening is critical—good filtering reduces interview volume significantly.
What is the difference between cost per hire and recruitment ROI?
Cost per hire measures only acquisition cost. Recruitment ROI compares this cost to value created by the hire (productivity, revenue, savings). A high cost per hire can have better ROI if the hire is exceptional; a low-cost hire that fails has worse ROI.
Calculateur du coût d'un mauvais recrutement
35 000 €
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