Most teams underestimate their true cost per hire in 2026—here's why.
The average U.S. cost per hire now sits around $4,700, but that’s just the surface. In 2026, most teams still miss the hidden costs driving this number higher: recruiter inefficiencies, time-to-fill delays, inflated job board spend, and lost productivity. Many 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.
Cost per hire statistics from 2025 and 2026
How much are companies really spending to hire in 2026? 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:
| Hiring category | Average cost per hire |
|---|---|
| All industries (U.S. avg) | ~$4,700 |
| Entry-level roles | $2,000–$3,000 |
| Technical hires | $6,000–$10,000+ |
| Executive hires | ~$28,000 |
| Employee referrals | ~$1,000 less per hire |
Note: Benchmarks compiled from SHRM and industry reports; actual costs vary widely by company size, location, and role complexity.
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 several times 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. Using structured async interviews and AI-resistant assessments can help you screen faster without sacrificing signal.
👉 Explore our guides to asynchronous interviews and AI-assisted screening 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 AI-assisted screening
- Quick win: Replace manual phone screens with async video interviews
- System fix: Use AI-assisted summaries, match scores, and assessments that measure personality, situational judgment, and environment fit—what AI can't fake
- 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 screen every applicant without phone-screening all of them—using async video interviews, AI-assisted summaries, and assessments that measure what AI can't fake.
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-assisted tools, the most efficient teams aren’t just cutting costs; they’re improving quality at the same time.
The TL;DR
Most teams underestimate their true cost per hire in 2026—here's why.
The average U.S. cost per hire now sits around $4,700, but that’s just the surface. In 2026, most teams still miss the hidden costs driving this number higher: recruiter inefficiencies, time-to-fill delays, inflated job board spend, and lost productivity. Many 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.
Cost per hire statistics from 2025 and 2026
How much are companies really spending to hire in 2026? 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:
| Hiring category | Average cost per hire |
|---|---|
| All industries (U.S. avg) | ~$4,700 |
| Entry-level roles | $2,000–$3,000 |
| Technical hires | $6,000–$10,000+ |
| Executive hires | ~$28,000 |
| Employee referrals | ~$1,000 less per hire |
Note: Benchmarks compiled from SHRM and industry reports; actual costs vary widely by company size, location, and role complexity.
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 several times 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. Using structured async interviews and AI-resistant assessments can help you screen faster without sacrificing signal.
👉 Explore our guides to asynchronous interviews and AI-assisted screening 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 AI-assisted screening
- Quick win: Replace manual phone screens with async video interviews
- System fix: Use AI-assisted summaries, match scores, and assessments that measure personality, situational judgment, and environment fit—what AI can't fake
- 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 screen every applicant without phone-screening all of them—using async video interviews, AI-assisted summaries, and assessments that measure what AI can't fake.
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-assisted tools, the most efficient teams aren’t just cutting costs; they’re improving quality at the same time.
Try Truffle instead.
