Hiring employees involves more than paying salaries. Employers must consider advertising, recruiter time, interview expenses and recruitment agency fees. Cost per hire helps Bangalore businesses understand how much they spend to fill each position and improve their hiring budgets. What Is Cost Per Hire? Cost per hire is the average recruitment expenditure for hiring one employee during a specific period. It includes direct costs, such as job advertisements and agency fees, along with indirect costs, such as HR and hiring manager time. The formula is: Cost Per Hire = Total Recruitment Costs ÷ Number of New Hires For example, if a company spends ₹2,00,000 and hires 10 employees, its cost per hire is ₹20,000. How to Calculate Cost Per Hire 1. Add All Recruitment Expenses Include job portal charges, recruitment software, employee referral bonuses, assessment costs and internal recruiter salaries. If you use a recruitment agency Bangalore, include the relevant placement fees. 2. Calculate Internal Hiring Costs Estimate the time HR professionals and managers spend sourcing candidates, reviewing CVs and conducting interviews. For example, if an HR executive earns ₹60,000 monthly and spends 25% of their time on recruitment, ₹15,000 can be allocated to hiring costs. 3. Divide Total Costs by New Hires Suppose a software company in Whitefield spends ₹2,70,000 on recruitment and hires 12 employees. ₹2,70,000 ÷ 12 = ₹22,500 per hire This figure helps the company evaluate its recruitment spending and compare hiring channels.
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