What is included in the cost per hire calculation?

• A. Advertising, employee referrals, recruiter wages and benefits, and new employees
• B. Office rent and utilities
• C. Annual training budget only
• D. Job postings on social media only

Answer: (A)

The main idea here is that cost per hire captures the total recruiting costs required to fill a position, divided by the number of hires. It accounts for the money spent specifically to attract and bring a candidate to the point of hire, including both external activities and internal recruiting effort.

Advertising and employee referrals are classic recruiting expenses because they directly generate candidates. Wages and benefits for recruiters are also part of the recruiting process, since those costs support the activities that find and screen applicants. Including costs associated with new employees aligns with onboarding and early integration costs that occur as part of bringing someone into the organization; these are part of the spend tied to making a hire successful.

The other options miss important recruiting costs or mix in non-recruiting expenses. Office rent and utilities are general overhead, not specific to filling a position. An annual training budget is broader ongoing development cost, not the expense incurred to recruit a single hire. Job postings on social media alone are too narrow to represent the full recruiting cost per hire.