What a hire actually costs
Echipa HR 365 · reviewed 2026-09-02 · 5 min read
The cost of a hire is what you pay to find the person plus what you lose until they produce as much as a colleague with tenure. The second part is almost always larger than the first and almost never calculated — which is why the “the fee is too high” conversation usually misses where the money actually goes.
Three categories, not one
So that you do not miss lines, think of the cost in three categories, in the order they appear: attraction cost (until you sign), integration cost (until the person works alone) and risk cost (what happens if they leave in the first months). The last does not enter the base calculation, but it decides whether it is worth investing more in the first two.
| Category | Line | How you estimate it |
|---|---|---|
| Attraction | Adverts and promotion | The actual amount paid to platforms, for that role |
| Attraction | Agency fee or referral bonus | Only if used; not averaged across all roles |
| Attraction | The recruiter’s time | Hours spent × internal hourly cost |
| Attraction | Interviewers’ time | Interviews × duration × each participant’s hourly cost |
| Integration | Equipment and licences | Laptop, phone, tools, accounts — amortised or not, but consistently |
| Integration | Manager and mentor time | Hours in the first 4–8 weeks × hourly cost |
| Integration | Initial training | Course hours × hourly cost, plus the course fee if external |
| Integration | Missing productivity | The gap against a colleague with tenure, across the whole ramp-up |
| Risk | The probability of an early departure | Used in the decision, not in the base cost |
The internal hourly cost: the one figure you set once
Five of the nine lines are calculated by multiplying hours by an hourly cost. If that cost is set ad hoc every time, the results cannot be compared between roles and the whole exercise becomes useless. Fix it once: the total employer cost for that role, divided by the number of hours worked in a month. Write the figure down with the date you calculated it, then reuse it for every calculation that year.
A concrete case: a specialist on a gross salary of 1,200 EUR
The role is filled in 6 weeks, without an agency. Three candidates interviewed, two interviews each — one with the recruiter, one with the manager. Ramp-up to full productivity: 10 weeks. Hourly cost: 9 EUR recruiter, 18 EUR manager.
- Adverts and promotion
- 120 EUR
- Recruiter time (24 h × 9)
- 216 EUR
- Manager time at interviews (6 h × 18)
- 108 EUR
- Equipment and licences
- 900 EUR
- Manager and mentor time at integration (30 h × 14 average)
- 420 EUR
- Initial training (8 h)
- 90 EUR
- Missing productivity (10 weeks at 45% of normal)
- 1,500 EUR
- Total cost of the hire
- ≈ 3,350 EUR
Nu intră în calcul:
- the new employee’s own salary — it is paid for work delivered, it is not a hiring cost
- the cost of space and utilities, if they do not change with the hire
- the time of colleagues answering occasional questions, too hard to measure to be worth it
The observation that changes the conversation: the largest line in the calculation is not an invoiced expense at all, it is the missing productivity. It depends almost entirely on how quickly the person becomes autonomous — that is, on the quality of the integration, the one line you fully control and which costs no extra money, only attention.
How you estimate the ramp without inventing figures
Missing productivity requires two estimates: how long the ramp takes and how much the person produces during it. You do not need precision, you need consistency. Ask two or three managers who integrated somebody into that role last year two things: after how many weeks did you stop checking every piece of work, and in the first month how much of a tenured colleague’s output were they producing. The average of the answers is good enough.
Then reuse the same values for every role in the same family. The moment you start adjusting the ramp for each individual hire is the moment the figure becomes negotiable, and a negotiable indicator measures nothing.
What you use the figure for, concretely
- To compare a hire with an internal promotion — the first is usually several times more expensive, and the comparison is rarely made explicitly.
- To argue for a retention budget: if one departure costs 3,350 EUR, a 500 EUR intervention that prevents two departures a year justifies itself.
- To decide whether an agency is worth it: the fee is compared with the internal time saved and the weeks the post stays empty, not with zero.
- To put a price on delay: every extra week of an unfilled post has a cost you can show rather than merely assert.
What this figure does not do: it does not say whether the hire was a good one. The right person stays an excellent investment at 5,000 EUR, the wrong one is a loss at 1,000. Cost per hire measures the efficiency of the process, not the quality of the decision — and it matters not to confuse the two in the conversation with leadership.
Why do we not include the salary in the cost of a hire?
Because the salary is paid for work delivered, whoever holds the post. What enters the cost is only the gap between what the new hire produces and what somebody with tenure would have produced — the missing productivity, which is already a separate line.
How do I calculate it for a role where I hire ten people at once?
Attraction costs are divided by the number of posts filled, integration costs stay per person. At volume, the first category drops a lot per head, the second barely at all — which is why volume recruitment is cheap to attract and expensive to integrate.
Headcount budgeting, with the real cost of each position
You set the ramp and the hourly cost once, and the recruitment budget recalculates for every open position, instead of being rebuilt in a spreadsheet each time.
Free account, every module for 7 days, no card required.