What specific costs must be included when calculating 'Cost per Hire' for a perfect ROI analysis?

• A. Advertising costs; agency fees; candidate assessments; and the value of time spent by HR and hiring managers.
• B. Only salaries and benefits.
• C. Office space and equipment.
• D. Training costs after hire.

Answer: (A)

Calculating cost per hire focuses on the recruitment process itself—the money and effort needed to attract, evaluate, and select a candidate. The best answer includes advertising outlays to reach applicants, agency or search fees for external recruiters, costs tied to candidate assessments used to gauge fit and capability, and the value of time that HR staff and hiring managers spend on posting, screening, interviewing, and coordinating candidates. These elements capture both direct expenses and the labor involved in filling a role, giving a true picture of the cost to bring someone on board.

Salaries and benefits of the new hire, office space and equipment, and training costs after hire are not part of the typical cost per hire calculation because they are ongoing or post-hire expenses related to employing the person, not the expenses required to recruit them.