Definition
Cost-per-hire or CPH is an important hiring and recruiting metric used by companies. CPH is the total cost of hiring new employees. This includes the cost of the entire recruitment process, travel costs, equipment costs, and administrative costs towards interviewing, background checks, etc. CPH is one of the most widely used HR metrics to check the effectiveness of the company's recruiting process.
Example
Cost Per Hire = (internal recruiting cost + external recruiting cost) / total recruitments in a period
Why it matters
CPH helps companies with the following aspects:1. Understanding the efficiency of the recruiting process.2. Identifying any flaws in the recruiting process and how to rectify them.3. Establishing and following recruiting budgets.4. Tracking overall recruiting cost.