The average cost per hire sits at $4,700 according to SHRM research, but for senior or technical roles, that number climbs past $28,000. International staffing changes that math significantly. Companies hiring through offshore or nearshore talent partners report cost-per-hire reductions of 40% to 70% compared to domestic recruitment, depending on the region and role type.
This guide breaks down how to calculate your cost per hire, what drives it up, and how hiring internationally through a staffing partner like Conexo cuts it down without sacrificing quality.
What Is Cost Per Hire?
Cost per hire (CPH) is the total internal and external spending required to fill one open position. It's one of the most widely tracked recruiting metrics because it connects your hiring process directly to your budget.
SHRM defines it with a standard formula adopted across the HR industry:
CPH = (Internal Recruiting Costs + External Recruiting Costs) / Total Hires in a Period
Internal costs include recruiter salaries, hiring manager time, HR software, and interview coordination. External costs cover job board fees, agency commissions, background checks, and relocation packages.
Most companies undercount their CPH because they track only the obvious external spend. Internal labor is often invisible on the budget sheet — but it's real.
The Cost Per Hire Formula (Step by Step)
Step 1: Add up your internal costs
Internal recruiting costs for a single role typically include:
- HR/recruiter time: If your recruiter spends 20 hours filling a role at a $35/hr fully-loaded cost, that's $700 per hire
- Hiring manager time: Screening calls, interviews, and debrief meetings can consume 8-15 hours at a manager's cost rate
- ATS and HR software: Prorate your annual software spend by hires per year
- Onboarding and training: First 90 days of productivity ramp, internal trainer time
Step 2: Add up your external costs
External costs for a single hire:
- Job boards: LinkedIn job posts run $300-$900 per post; Indeed can vary from free to $1,500+ for sponsored placements
- Staffing agency fees: Traditional domestic agencies charge 15-25% of the candidate's first-year salary
- Background checks: $50-$200 per candidate screened
- Relocation: $5,000-$25,000 for relocating domestic candidates
Step 3: Divide by hires
If you spent $47,000 total recruiting in a quarter and filled 10 roles, your CPH is $4,700.
That's the industry average. Most companies don't know theirs.
Average Cost Per Hire by Industry and Role Level
Industry and seniority drive CPH more than any single process decision. Here's what the data shows:
| Role Level | Typical US CPH | Driver |
|---|---|---|
| Entry-level / admin | $1,000 - $3,500 | High volume, low agency use |
| Mid-level professional | $4,000 - $8,000 | More screening, some agency use |
| Senior / technical | $10,000 - $28,000 | Specialized skills, competitive market |
| Executive (VP+) | $30,000 - $80,000+ | Search firm fees (15-33% of salary) |
| Sales (commissioned) | $4,500 - $15,000 | High turnover amplifies total cost |
Source: SHRM Human Capital Benchmarking Report, LinkedIn Talent Solutions Global Talent Trends 2024.
Executive search is the most expensive category by far. A single VP hire through a retained search firm at 25% of a $200,000 salary costs $50,000 in fees alone, before any internal time. Our guide on executive search firms vs. international staffing covers this trade-off in detail.
What Drives Cost Per Hire Up
Five factors inflate CPH faster than any other:
1. Long time-to-fill. Every week a role sits open, you're paying recruiter time, losing productivity, and burning manager bandwidth. LinkedIn research shows average time-to-fill in the US is 44 days for professional roles. Technical roles often run 60-90 days.
2. High agency commissions. Domestic staffing agencies charge 15-25% of first-year salary. On a $90,000 sales role, that's $13,500-$22,500 per placement. If you fill 10 roles a year this way, you're spending $135,000-$225,000 in fees alone.
3. Competitive local markets. In markets like San Francisco, New York, or Toronto, candidates have multiple offers. Signing bonuses, salary inflation, and counteroffers add thousands per hire.
4. High turnover. If a hire leaves in 6 months, you pay CPH again. Sales roles, for instance, have average tenure under 2 years in many industries. Turnover multiplies your effective CPH dramatically.
5. Unstructured process. Without a defined interview funnel, hiring managers spend more time per candidate, decisions take longer, and offers go stale.
How International Staffing Reduces Cost Per Hire
Hiring internationally through a talent partner like Conexo changes the economics at almost every step.
Here's how CPH compares when you add an offshore or nearshore hiring model:
| Cost Component | Domestic (US/Canada) | International via Conexo |
|---|---|---|
| Agency fee per hire | 15-25% of salary | Flat fee or lower % |
| Candidate salary | $60,000 - $120,000/yr | $15,000 - $45,000/yr |
| Time-to-fill | 44-90 days | 2-4 weeks |
| Job board spend | $300 - $1,500/post | Included |
| Relocation | $0 - $25,000 | $0 (remote) |
| Effective CPH | $4,700 - $28,000 | $1,500 - $8,000 |
The biggest lever isn't the agency fee, it's the salary. A senior accountant in Madagascar earns $8,000-$15,000 per year. The same role in Canada costs $65,000-$85,000. Even after you factor in international staffing fees, the total cost per hire is a fraction of the domestic equivalent.
Conexo sources talent from more than 50 countries, with strong pipelines in Madagascar, the Philippines, India, Morocco, Kenya, Tunisia, and across South America. Many of the professionals in those networks are English and French bilingual, which matters for companies needing client-facing or documentation-heavy roles.
Cost Per Hire by Region: What to Expect
The cost advantage of international hiring varies by region and role. Here's a realistic breakdown:
Madagascar
Madagascar has become a strong sourcing market for back-office, data, and customer-facing roles. Salaries run $6,000-$18,000 annually for professional roles. Conexo's regional guide on hiring in Africa covers exact numbers for Madagascar, Morocco, and Tunisia.
South America (Colombia, Argentina, Brazil)
South America offers strong talent for tech, sales, and operations roles in similar time zones to North America. Salaries range from $12,000-$35,000 for mid-level professionals depending on country and role. See our full breakdown in how to hire in South America.
India
India remains the deepest market for technical and back-office talent. Mid-level developers earn $12,000-$28,000 annually. Our guide to hiring in India through a staffing agency breaks down the process and costs.
Philippines, Kenya, Tunisia, Morocco
Each market has distinct strengths. Philippines for customer service and operations. Kenya for finance and professional services. Tunisia and Morocco for French-language roles and tech talent close to European time zones.
How to Calculate Your Reduced CPH with International Staffing
Use this simplified model to estimate what your CPH looks like if you shift even a portion of hiring offshore:
Current CPH (example):
- 10 hires per year
- Average salary: $75,000
- Agency fee: 20% = $15,000 per hire
- Internal costs: $3,000 per hire
- Current CPH: $18,000
Offshore CPH (same roles, filled internationally):
- Average salary: $20,000
- Staffing partner fee: flat $3,000-$5,000 per hire
- Internal costs: $1,500 (faster process)
- Offshore CPH: $5,000 - $6,500
That's a 64% reduction in cost per hire. On 10 hires, you save $115,000-$130,000 annually.
The savings compound when you factor in retention. International hires through a trusted staffing partner typically have longer tenure than domestic hires placed through contingency recruiters — because the vetting process is more thorough and the compensation is more competitive relative to local market rates.
What CPH Doesn't Capture (But You Should Track Anyway)
Cost per hire tells you what it costs to fill a role. It doesn't tell you whether you filled it well. Track these alongside CPH:
Quality of hire: Hiring manager rating of the new hire at 90 days. Low CPH with poor quality-of-hire is expensive — you'll pay CPH again when the person leaves or underperforms.
Time to productivity: How long before the hire is fully contributing? International hires with strong onboarding often ramp faster than domestic hires, because companies invest more intentionally in remote onboarding.
Turnover rate by source: If your domestic agency hires leave at 35% within 12 months but your international hires stay at 80%, your effective CPH from the agency is 2.7x the sticker price.
Offer acceptance rate: If you're losing candidates at the offer stage, your CPH calculation is understating the cost (the failed searches still consumed recruiter time).
FAQ
What is a good cost per hire benchmark?
According to SHRM's Human Capital Benchmarking Report, the average CPH across industries is $4,700. For small businesses, it's often lower ($1,500-$3,000). For companies hiring specialized technical or senior roles, $15,000-$30,000 is common. A "good" CPH depends on the role level and whether the hire actually works out.
How do I calculate cost per hire?
Use this formula: (Total Internal Recruiting Costs + Total External Recruiting Costs) / Number of Hires in the Period. Internal costs include recruiter time, hiring manager time, and HR software. External costs include job board fees, agency commissions, and background checks. Most companies find their real CPH is 30-50% higher than they estimated because internal costs are invisible in most budget systems.
What is the biggest driver of high cost per hire?
Staffing agency fees are the most visible driver. A 20% commission on a $90,000 salary is $18,000 per placement before you add any internal costs. But high turnover is often the biggest hidden driver. If a hire leaves in 6 months, your true CPH for that role is double what you recorded.
How does international hiring reduce cost per hire?
Two ways. First, salaries in markets like India, Madagascar, the Philippines, Morocco, Tunisia, and South America are 50-80% lower than North American equivalents for many professional roles. Second, international staffing partners like Conexo charge flat fees or lower percentages than domestic contingency agencies, and time-to-fill is typically shorter (2-4 weeks vs. 6-12 weeks). The combination cuts CPH by 40-70% for suitable roles.
Which roles are best suited for international hiring to reduce CPH?
Sales development and cold calling teams, customer support, data entry and operations, accounting and bookkeeping, software development, and back-office administrative roles are all strong candidates. Roles that require local presence (field sales, physical operations, government-regulated work) are not. If you're building a remote cold calling team, international staffing typically cuts CPH by more than 60% versus domestic alternatives.
What should I include in my CPH calculation for remote hires?
All the same components as domestic hires, plus any remote setup costs (equipment, internet stipend if applicable, onboarding tools). For international hires through a staffing partner, most of the compliance, payroll setup, and benefits administration costs are included in the partner's fee. Factor in 1-2 hours of additional onboarding coordination per hire for timezone and communication setup.
How does cost per hire relate to cost to hire?
They're often used interchangeably. "Cost to hire" sometimes refers to the total investment including onboarding and ramp time (a broader definition), while "cost per hire" is more commonly used for the recruitment-only spend. SHRM's standard formula covers the recruitment phase only. If you want to capture total onboarding investment, add your first-90-day training and productivity ramp costs.
Sources & References
- SHRM Human Capital Benchmarking Report — average CPH data ($4,700 benchmark) and formula definition
- LinkedIn Global Talent Trends 2024 — time-to-fill benchmarks and competitive hiring market data
- U.S. Bureau of Labor Statistics — Employer Costs for Employee Compensation — employer burden rates used in internal cost calculations
- Glassdoor Economic Research — The True Cost of Hiring — analysis of hidden hiring costs beyond direct fees
- ANSD (Madagascar National Statistics Institute) — professional salary ranges in Madagascar used in regional cost comparison
Related articles
- How to Cut Hiring Costs with Offshore Staffing: A Cost Guide
- Offshore Outsourcing: Which Region Saves You the Most?
- Executive Search Firms vs. International Staffing: A Cost Guide for 2026
- Hiring in Africa: Madagascar vs Morocco vs Tunisia — A Cost Guide
- How to Hire in South America: Costs by Country (2026)