Think your cost per hire is under control in 2025? Think again.
The average U.S. cost per hire now sits around $4,700, but that’s just the surface. In 2025, most teams still miss the hidden costs driving this number higher: recruiter inefficiencies, time-to-fill delays, inflated job board spend, and lost productivity. Internal surveys show 38% of SMBs underestimate their hiring costs, often forgetting that every empty seat can cost a business $500 per day in lost output.
And despite a softening labor market, costs haven’t dropped. Wage inflation, turnover, and fragmented workflows are keeping hiring expensive, even for entry-level roles.
If you haven’t recalculated your true cost per hire recently, now’s the time.
Cost per hire definition
At its core, cost per hire measures what it actually takes—financially—to bring someone new into your organization. It’s a standardized recruiting metric used by HR leaders to evaluate hiring efficiency across roles, departments, or even entire companies.
According to the SHRM cost per hire formula, it includes both internal and external expenses divided by the number of hires made within a given period. But many companies under-scope what’s included.
Here’s what typically goes into the calculation:
Direct costs
- Job ads and sponsored listings
- Agency or headhunter fees
- Background checks and assessments
- Signing bonuses
- Relocation costs
Indirect costs
- Recruiter and hiring manager time
- Internal HR software and tools
- Interview scheduling and coordination
- Onboarding and training
The cost per hire formula
The basic cost per hire formula is simple:
(Total external costs + Total internal costs) ÷ Number of hires
Let’s say you spent:
- $10,000 on job ads, assessments, and background checks (external)
- $12,000 on internal recruiter salaries and interview time from managers
And you hired 4 people.
Your cost per hire would be:
($10,000 + $12,000) ÷ 4 = $5,500 per hire
Easy enough, but here’s where many teams go wrong. Most calculators leave out the opportunity cost of time. If a manager spends five hours per hire across interviews, debriefs, and coordination, that’s time not spent managing their team or hitting revenue goals. And that lost productivity adds up fast.
It’s why some companies report $3,000 per hire, while others with the same roles and headcount spend over $10,000. The inputs—not just the equation—make all the difference. When in doubt, assume your real cost is higher than what your budget spreadsheet shows.
Free cost per hire calculator
Want to see what you’re really spending to hire? Use this free cost per hire calculator to break it down—no spreadsheet required.
Just plug in your internal and external costs, number of hires, and any optional extras like time spent per candidate. It’s fully mobile responsive, defaults to USD, and includes both basic and advanced inputs if you want to get granular. The calculator is styled to match the Truffle brand, so it fits seamlessly into your workflow.
Cost per hire statistics from 2024 and 2025
How much are companies really spending to hire in 2025? According to the latest data, the average cost per hire in the United States is around $4,700, based on SHRM benchmarks. But that figure varies widely based on company size, role type, and industry.
Here’s a breakdown:
Why your cost per hire is higher than you think
Not all costs show up in your recruiting budget. Here are six hidden factors that could be inflating your real cost per hire—and what to do about them.
Recruiter tech stack bloat
Using five tools to do what one integrated system can handle? Duplicate spend adds up fast.
Ghosted interviews
Every no-show wastes recruiter time and slows down the funnel. Structured async interviews can reduce drop-offs.
Manager time leakage
Hiring managers often spend 3–5 hours per candidate, costing hundreds in lost productivity.
Overreliance on job boards
Paid listings dominate many recruiting budgets, but conversion rates vary wildly.
Bad-fit hires and quick quits
A bad hire can cost 3–4x the position’s salary when you include replacement and lost output.
Slow screening processes
A longer time-to-fill means more job ad renewals, more internal hours, more overhead.
👉 Explore our guides to asynchronous interviews to tighten up these cost drivers.
How you can cut cost per hire fast
Here’s how hiring teams can start saving within 90 days—without sacrificing quality.
- Switch to structured video interviews
- Quick win: Replace manual phone screens
- System fix: Use async tools with AI summaries to screen faster and fairer
- Tighten paid job board spend
- Quick win: Pause low-conversion channels
- System fix: Double down on high-yield referral programs
- Reuse evergreen hiring pipelines
- Quick win: Re-engage past candidates for open roles
- System fix: Build pools with notes and tags for future outreach
- Automate interview scheduling
- Quick win: Use a self-scheduling tool
- System fix: Connect it to your ATS or CRM to eliminate bottlenecks
Ready to streamline? Try Truffle to save hours on one-way video interviews and reduce your cost per hire with less effort.
Cost per hire action plan
- Check your internal cost tracking setup
- Benchmark current spend against latest data
- Run the calculator monthly to monitor trends
- Set a 90-day reduction target by role type
- Automate early screening and scheduling
Why lowering cost per hire compounds growth
Reducing your cost per hire doesn’t just cut expenses—it unlocks growth.
Every dollar saved on recruiting can be reinvested in better sourcing, onboarding, or retention. Faster hiring cycles mean fewer gaps on your team, and more bandwidth for HR to focus on long-term talent strategy.
And with the rise of AI-powered tools, the most efficient teams aren’t just cutting costs; they’re improving quality at the same time.
