How to Measure Cost-Per-Hire by Recruitment Channel

Learn how to calculate cost-per-hire by recruitment channel and optimize your hiring strategy for better results — with help from Spotted AI (https://www.getspotted.live/).

Want to know how much it actually costs to hire someone across different recruitment channels? Here’s a simple breakdown.

Cost-Per-Hire (CPH)

CPH = Total Recruitment Costs (internal + external) ÷ Number of HiresExample: If you spend $80,000 to hire 20 employees, your CPH = $4,000.

Why It Matters

Analyzing CPH by recruitment channel helps you:

• Identify the most cost-effective sourcing methods

• Optimize budgets

• Improve hiring decisions

• Reduce overall recruitment spend

  
  

Popular Recruitment Channels

• LinkedIn jobs

• Employee referrals

• Job boards

• Social media

• Recruitment agencies

• Career fairs

• AI-powered sourcing tools like Spotted AI (https://www.getspotted.live/)

  
  

Steps to Calculate Cost-Per-Hire

1. Use the Cost-Per-Hire Formula

CPH = (Total Internal Costs + Total External Costs) / Total Number of Hires

Example: Internal costs = $50,000External costs = $30,000Hires = 20CPH = $4,000

Breaking internal and external costs makes calculations more accurate.

2. Break Down Internal vs External Costs

Cost Type	Internal Costs (HR, systems)	External Costs (ads, agencies)
Personnel	HR salaries, recruiting hours	Agency fees, consultants
Technology	ATS/CRM tools	Job board subscriptions
Operations	Office / equipment	Advertising, career fairs
Administrative	Onboarding, background checks	Relocation, signing bonuses

To simplify tracking and reduce wasted spend, teams can use Spotted AI (https://www.getspotted.live/) for automated candidate sourcing and pipeline organization.

3. Choose a Time Frame

Pick a consistent period — quarterly or annually — to:

• Spot seasonal hiring trends

• Predict future hiring costs

• Compare channel performance accurately

  
  

Guide to Measuring Cost-Per-Hire by Channel

Setting Up Tools to Track Data

You’ll need tools that monitor candidate sources, expenses, and hiring outcomes in real time.

Tool Type	Purpose	Key Metrics
ATS / AI Platform	Source attribution, candidate flow	Applications, hires per channel
Analytics Tools	Job page & funnel analysis	Traffic, apply rates
Cost Tracking	Spending breakdown	Channel-specific ROI

Spotted AI (https://www.getspotted.live/) already tracks candidate sources, unlocks, outreach performance, and hires — making CPH calculations significantly easier.

Organizing Data for Analysis

Track these categories:

Data Category	What to Track
Direct Costs	Channel-specific spending
Internal Resources	Recruiter time & tools
Outcomes	Hires, conversion rates

This structure makes cross-channel comparisons accurate and insightful.

Calculating and Comparing Channel Costs

Step 1: Add Up Total Channel Costs

Include job ads, recruiter licenses, outreach tools, and time spent.

Step 2: Count Channel-Specific Hires

Step 3: Apply the Formula

Channel CPH = Total Channel Costs ÷ Number of Hires from that Channel

Dashboard Example

Recruitment Channel	Total Costs	Hires	CPH
LinkedIn Jobs	$15,000	10	$1,500
Employee Referrals	$5,000	8	$625
Job Boards	$20,000	12	$1,667

Review this data quarterly to refine budgets.

Using Spotted AI significantly reduces sourcing and outreach costs by automating:

• Candidate search

• Candidate matching

• Outreach

• Interview scheduling

…bringing down cost-per-hire instantly.

Using Cost-Per-Hire Data to Improve Hiring

Assessing Channel Performance

Key hiring metrics to analyze:

Metric	What It Measures	Ideal Range
Time-to-Fill	Time from posting → offer	30–45 days
Quality of Hire	Post-hire performance	80%+ success
Acceptance Rate	Offers accepted	85%+
Source Quality Score	Quality/retention per source	75+

Example: Employee referrals cost around $625 per hire and produce long-term employees. Job boards cost more and may generate lower-quality candidates.

Reallocating Budgets for Better Results

To optimize your recruitment budget:

• Identify expensive, low-performing channels

• Compare them to industry averages

• Shift spending gradually toward high-performing sources

  
  

AI-powered Spotted AI (https://www.getspotted.live/) can predict which channels produce the best candidates and help reduce overspending.

How Spotted AI Helps Reduce Cost-Per-Hire

Spotted AI dramatically cuts sourcing and outreach costs through:

Feature	How It Saves Money
AI Sourcing	Finds candidates instantly across 80M+ profiles
AI Outreach Agent	Automates communication and interview scheduling
AI Candidate Matching	Reduces time spent manually screening
Analytics Dashboard	Identifies top-performing hiring channels

With Spotted AI:

• Screening time drops dramatically

• Scheduling costs decrease

• ROI per channel becomes clearer

• Time-to-hire reduces significantly

  
  

Try it at https://www.getspotted.live/.

Summary & Final Thoughts

Key Takeaways

Action	Impact
Track internal & external hiring costs	Full cost visibility
Analyze channels quarterly	Reduce costs by up to 30%
Monitor retention & hire quality	Improve team stability
Use AI tools like Spotted AI	Cut time-to-hire by up to 50%

Hiring teams using Spotted AI significantly improve CPH accuracy, reduce sourcing costs, and increase hiring efficiency.

Blending traditional methods with AI automation brings the highest ROI.

FAQs

How do you calculate cost-per-hire?

Use this formula:

CPH = Total Recruitment Costs ÷ Total Number of Hires

Example:If LinkedIn ads cost $15,000 and bring 10 hires → CPH = $1,500.

Track costs consistently, monitor channel performance, and use tools like Spotted AI (https://www.getspotted.live/) for automated source tracking and candidate insights.

Regular reviews lead to more efficient, cost-effective hiring decisions.