The short answer
You calculate cost per hire by dividing the total recruitment costs within a chosen period by the number of hires you attribute to that recruitment. Use the same cost items when comparing a campaign, an agency, or in-house recruitment. A fixed price and a placement fee are different payment structures, not evidence of a better outcome.
Which costs do you include?
Start with a fixed definition, so you are not comparing an advertising budget against a full selection process. Make clear which costs are included in the quote and which your team absorbs itself.
- Campaign or agency costs.
- Advertising budget and any production of campaign content.
- Time spent on assessment, contact, interviews, and administration.
- Any other costs you attribute to the recruitment.
If you wish, keep external invoice costs and internal time as two separate figures. That makes it clear whether a lower invoice amount comes with more work for your own team.
A calculation example, not a market average
Suppose a campaign generates total external costs of €6,000 over an agreed period. If that demonstrably leads to two hires, the external cost is €3,000 per hire. At one hire, it is €6,000. Internal time is not included in this example.
These are fictional amounts to illustrate the calculation; they are not a Red Rocket rate, not a benchmark, and not a promised outcome. Without hires, you cannot report a meaningful cost-per-hire figure. Look at progress and causes instead, without counting conversations as hires.
How do you compare a fixed price with a placement fee?
With a fixed price, ask about the duration, the campaign effort, and what happens if results do not materialise. With a placement fee, ask about the basis, payment moments, and conditions. In both cases, check whether advertising budget and qualification are included.
If a quote charges, for example, 20% on an agreed basis of €60,000, the calculated fee is €12,000, before any VAT and other agreed costs. This is purely a calculation example. It does not suggest that 20% is a common or appropriate rate. Use the actual quotes for your comparison.
Consider quality and lead time too
A low price per response can go hand in hand with many unsuitable responses. So track the step from response to qualification, interview, and hire. Record the criteria a candidate must meet. Also agree on how you attribute a hire when someone appears through multiple channels.
Red Rocket works with a fixed amount per campaign per calendar month and charges no fee per hire. Role, region, and scope determine the proposal. There is no public standard rate here because a useful comparison first requires a clearly defined brief.
Compare the different recruitment approaches before choosing on price alone.
Frequently asked questions
What is a good price per application?
Without context, there is no useful general figure. First define what counts as an application and how many responses lead to suitable interviews and hires.
Which period do you use for cost per hire?
Choose a period that fits the campaign and the selection lead time. State the period explicitly and avoid comparing this month's costs against hires from an older campaign.
