Methodology: Cost Per Hire Calculator

1. Scope

Sums external (ads, agency) and internal (hours × hourly rate) recruiting costs plus onboarding to produce cost per hire. It does not model time-to-productivity or first-year attrition loss.

2. Inputs and outputs

Inputs

jobAdsCost number (currency)
agencyFee number (currency) default: 0
internalRecruiterHours number
internalHourlyRate number (currency)
hiringManagerHours number
onboardingCost number (currency) default: 0

Outputs

externalCost

jobAdsCost + agencyFee.
internalCost

(recruiterHours + managerHours) × hourlyRate.
costPerHire

externalCost + internalCost + onboardingCost.

Engine source: src/lib/cost-per-hire-calculator/engine.ts

3. Formula / scoring logic

external_cost = ads + agency_fee
internal_cost = (recruiter_hours + manager_hours) * hourly_rate
cost_per_hire = external_cost + internal_cost + onboarding

4. Assumptions

Internal time is priced at a loaded hourly rate (salary + benefits ÷ working hours).
Onboarding cost is first-month expenses; longer ramp-to-productivity is out of scope.
No discount for re-used sourcing pipelines or employer-brand investment.

5. Data sources

6. Known limitations

Industry-wide cost-per-hire medians carry heavy population skew; SHRM 2022 reports $4,700 but that averages across agency-heavy enterprise roles and low-cost front-line hiring.
Failed-hire cost (attrition in first 12 months) is not computed. A common rule of thumb — 1× to 2× annual salary — has limited academic backing and is not cited as a precise benchmark.

7. Reproducibility

Input
ads = $500, agency = $0, recruiterHrs = 20, managerHrs = 10, hourlyRate = $75, onboarding = $1,500.

Expected output
external = $500, internal = $2,250, cost_per_hire = $4,250.

8. Change log

2026-04-24 methodology page first published.