Cost per hire is the total cost of filling roles, divided by the hires made in one period. The formula is (internal costs + external costs) ÷ number of hires. SHRM’s 2025 benchmarking reports a median of $1,200 for nonexecutive hires and $10,625 for executive hires.
Those medians are reported in US dollars. At the fixed dirham rate of 3.6725, they equal about AED 4,400 and AED 39,000. UAE employers should add local costs such as work permits, medical tests, and relocation.
This guide shows what to include and how to calculate the figure step by step. It also compares agency and in-house hiring costs. Our guide to hiring in Dubai covers the broader process.
Last updated: 6 November 2026
Key Takeaways
- SHRM’s 2025 median cost per hire is $1,200 for nonexecutive roles.
- The 2025 executive median is $10,625, up 113% since 2017.
- Time to fill was about 45 days for both groups in 2025, per SHRM.
- UAE permit and visa steps add roughly AED 2,200 to 6,800 per hire.
- An agency fee of AED 30,000 raised the example’s cost per hire to AED 35,500.
Cost Per Hire Formula: What Goes In
The cost per hire formula adds every internal and external hiring cost. Then it divides the total by the number of hires. Use one fixed period, such as a quarter, for both the costs and the hire count.
SHRM’s 2025 Recruiting Executives Benchmarking report lists the cost components. They include agency fees, job boards, referral costs, travel, relocation, recruiter pay, and talent acquisition systems.
Recruitment cost per hire: internal and external costs
Recruitment cost per hire splits into costs your team carries and costs you pay to others.
| Cost Type | Examples |
|---|---|
| Internal | Recruiter salary share, hiring manager interview time, referral bonuses |
| External | Job boards, recruiter licences, agency fees, background checks, assessments |
| UAE specific | Work permit, medical test, Emirates ID, relocation or flights |
SHRM does not list visa fees as a component. In the UAE, they are a real cost of every overseas hire, so track them separately. Our UAE employment visa cost guide breaks down each fee, based on the MOHRE work permit service page.
How Do You Calculate Cost Per Hire? Step by Step
Calculating cost per hire takes five steps, and the order below keeps the numbers consistent.
- Choose a period and count every hire that started in it.
- List internal costs, including the share of recruiter and manager time spent hiring.
- List external costs, including fees, tools, checks, permits, and relocation.
- Add the internal and external totals together.
- Divide the total by the number of hires.
Prorate every shared cost to reflect real effort. A recruiter who spends 60% of the quarter on hiring contributes 60% of the salary. Convert manager time with a simple hourly rate, then multiply by the interview hours logged.
How to calculate cost per hire: a worked example
This example is illustrative, and it assumes a Dubai company that makes six hires in one quarter.
| Cost Line | Calculation | AED |
|---|---|---|
| Recruiter salary share | 14,000 × 3 months × 60% | 25,200 |
| Hiring manager time | 72 hours × AED 250 | 18,000 |
| Referral bonuses | 2 × 3,000 | 6,000 |
| Internal total | 49,200 | |
| Job boards and adverts | 9,000 | |
| Recruiter licence share | 7,500 | |
| Background checks | 6 × 300 | 1,800 |
| Assessments | 3,000 | |
| Work permits for four overseas hires | 4 × 3,500 | 14,000 |
| Relocation for one hire | 12,000 | |
| External total | 47,300 |
Total cost is AED 96,500. Divided across six hires, the cost per hire is AED 16,083.
Common mistakes that distort the figure
Most errors come from missing costs or mixing periods. Check your calculation against these points:
- Leaving out manager interview time, which is often the largest internal cost.
- Counting hires from one quarter against costs from another.
- Excluding permits, medical tests, and flights for overseas hires.
- Counting a candidate who accepted but never joined.
Agency vs In-House: Recruitment Cost Per Hire
Agency hiring raises the external cost line but cuts internal time. The better comparison adjusts for hires who leave early.
Take five hires placed by an agency at an illustrative fee of AED 30,000 each. Add interview time of AED 10,000 and permits of AED 17,500. Total cost is AED 177,500, or AED 35,500 per hire.
Now assume one hire leaves during probation. The table shows how the replacement terms change the result for the whole group.
| Scenario | Total Cost (AED) | Cost Per Hire (AED) |
|---|---|---|
| All five hires stay | 177,500 | 35,500 |
| One leaves, free replacement | 183,000 | 36,600 |
| One leaves, new fee paid | 213,000 | 42,600 |
A free replacement adds only interview time and a new permit. A second fee adds AED 30,000 to the total. Divide total cost by the number of hires still in the role after 90 days to get a retention-adjusted figure. Our guide on the true cost of a bad hire explains the wider impact.
For permanent roles, compare fee terms before you sign. Our contract vs permanent staffing framework helps you decide which model suits the role.
Average Cost Per Hire by Industry and Seniority
No primary source publishes a reliable average cost per hire by industry. SHRM’s 2025 brief reports medians by seniority and does not split them by industry. Most industry tables online cite no source.
The seniority split is clear in SHRM’s medians.
| Year | Nonexecutive (USD) | Executive (USD) |
|---|---|---|
| 2017 | 1,633 | 5,000 |
| 2022 | 1,244 | 8,750 |
| 2025 | 1,200 | 10,625 |
Executive hiring costs about 8.9 times as much as nonexecutive hiring at the 2025 medians. SHRM’s executive median rose 21% between 2022 and 2025, while the nonexecutive median edged down. SHRM’s sample is mostly US members, so treat the figures as a reference point.
Industry changes which cost lines dominate, not only the total. These are the drivers worth tracking in your own data:
- Technology: assessments, recruiter tools, and competition for scarce skills.
- Banking and finance: regulatory checks, licences, and notice periods.
- Manufacturing: permit volume and technical screening.
- Real estate and construction: high-volume hiring and onboarding.
Build your own benchmark by calculating the figure for each department every quarter, using the same cost lines. Our Dubai salary guide helps you set salary ranges alongside those costs.
How to Lower Your Cost Per Hire
Lower the figure by removing waste, not by cutting screening checks that protect hiring quality. Review the points below each quarter, and compare the result with the previous one.
- Count every cost line, including manager time and permits.
- Compare cost per hire by channel and drop weak ones.
- Track time to fill, since SHRM reports about 45 days.
- Reuse earlier shortlisted candidates through a talent pipeline.
- Measure retention at 90 days, not only the hire count.
- Review agency terms for fee timing and replacement cover.
How Caliberly Keeps Recruitment Cost Per Hire Predictable
Caliberly is a recruitment agency serving employers across industries. The firm charges no upfront retainer on its placements. The fee is payable 7 to 14 days after the candidate joins. You therefore pay only for a completed hire.
A 90-day free replacement guarantee also applies. If a placed candidate leaves, the replacement search carries no new fee. Recruiters speak to about forty candidates for every four they shortlist, so your panel reviews fewer profiles. Explore our permanent recruitment service, or contact Caliberly to scope a role.
Frequently Asked Questions
Is cost per hire the same as cost of vacancy?
They are different measures. Cost per hire counts what you spend to fill a role. Cost of vacancy counts the output lost while the seat is empty. Track both, since a slow search can cost more than a fee.
Should onboarding and training count in cost per hire?
Many teams exclude them because SHRM’s component list stops at hiring costs. Track onboarding as a separate line, which keeps your figure comparable with published benchmarks.
How often should we calculate cost per hire?
Calculate it every quarter, using the same hire count and cost lines each time. Quarterly figures show trends early, while a single annual number hides spikes from large hiring bursts.
Do internal transfers count as hires?
They count only if your team spent real recruiting effort on them. Many employers keep internal moves in a separate metric. State your rule once, then apply it every period.
Can a low cost per hire hide a problem?
Yes, because a cheap hire who leaves in probation raises the true cost of the role. Pair the metric with 90 day retention and manager satisfaction.
Need a clearer hiring budget? Submit your hiring requirement and our team will respond with a search plan.
