A manufacturer made 12 hires last quarter. Using the recruiting costs in the table, what was the cost-per-hire?
| Cost item | Amount |
|---|---|
| Job board advertising | $7,200 |
| Staffing agency fees | $15,600 |
| Career fair booth | $1,800 |
| Background checks | $1,400 |
| Recruiter salaries (allocated) | $10,800 |
| Employee referral bonuses | $3,000 |
Show answer & explanation
Answer: 3316.67 dollars
- Cost-per-hire = (external costs + internal costs) ÷ total hires.
- External costs (paid to outside vendors) = $7,200 advertising + $15,600 agency fees + $1,800 career fair + $1,400 background checks = $26,000.
- Internal costs (spent inside the organization) = $10,800 recruiter salaries + $3,000 referral bonuses = $13,800.
- Total costs = $26,000 + $13,800 = $39,800; $39,800 ÷ 12 = $3,316.67.
- Common error: counting only the vendor (external) costs gives $26,000 ÷ 12 = $2,166.67.
Cost-per-hire adds every recruiting cost in the period, both external (vendor) and internal (in-house), and divides by the number of hires.