Cost per Hire
Cost per Hire is the total amount you spend on recruitment divided by the number of positions you successfully fill. It includes salaries for anyone involved in hiring, job board fees, agency commissions, and background check costs. You calculate it to understand whether your recruiting budget is sustainable and where money is going.
Cost per Hire tells you exactly what it costs your company to bring one new employee on board. Divide your total recruiting expenses over a period (usually one year) by the number of people hired in that same period. The result shows whether you're spending CHF 2,000 or CHF 15,000 per hire—a critical number for budgeting.
SMEs in Switzerland often underestimate this figure because they spread costs across multiple departments. The HR person's salary, job board subscriptions, time spent by managers interviewing candidates, LinkedIn Recruiter credits, background checks—none of these feel like "recruiting costs" until you add them up.
When Cost per Hire Matters
You need this metric whenever you're planning your annual hiring budget or evaluating whether to use an agency versus recruiting internally. If you hired 8 people last year and spent CHF 45,000 total, your Cost per Hire was CHF 5,625. That baseline helps you forecast next year's needs.
It's especially relevant when you're scaling. A startup hiring 15 people in year two should expect different costs per hire than a stable company replacing one person annually. Seasonal hiring in hospitality or retail also skews this number significantly.
- Calculate annually to spot trends in your recruiting efficiency
- Use it to justify recruiting tool investments to your accountant or co-founders
- Compare your Cost per Hire across different job levels (apprentice vs. manager role)
- Track whether using an agency (typically 15–25% of first-year salary) is cheaper than internal recruiting for hard-to-fill roles
- Monitor if your Cost per Hire is rising—signals inefficiency or tighter labor market
- Benchmark against your industry, though Swiss sector data is limited
What to Include in the Calculation
Include every cash outlay and internal cost. Job board fees (LinkedIn, Jobs.ch, Indeed), agency commissions, background check services, and any recruiting software subscription. Add the salary cost for the time your team spends recruiting—estimate in hours if no dedicated recruiter exists.
Don't double-count severance or redundancy costs from departing staff. Those belong in turnover analysis, not Cost per Hire. However, do include training and onboarding expenses directly tied to bringing the hire up to full Pensum productivity.
- Job board subscriptions and sponsored postings (Jobs.ch, Indeed, LinkedIn)
- Recruitment agency commissions (standard 15–25% of first-year gross salary in Switzerland)
- Background checks, medical exams, and certifications required before hire date
- Internal time: recruiter, hiring manager, and panel interview hours valued at loaded salary
- Recruiting software tools (applicant tracking, interview scheduling, reference checking)
- Relocation or visa costs if applicable in your canton
The Most Common Mistake
SMEs forget to value their own time. You spent 30 hours interviewing candidates—so what, right? Wrong. At CHF 50/hour loaded cost, that's CHF 1,500 already. Most small employers think their Cost per Hire is much lower than it actually is because they don't account for internal labor.
The second mistake is treating all hires the same. A junior apprentice (3-year Pensum) costs far less to onboard than a senior manager. Calculate Cost per Hire separately by role level or department, not one blended number, or your budget forecast will miss badly.
- Ignoring internal team time makes your Cost per Hire appear artificially low
- Blending apprentice and senior hires into one metric masks real budget drivers
- Using only agency fees and forgetting your subscription costs or interviewer hours
- Including one-off hiring costs (new office setup) in a single hire's cost instead of amortizing
- Forgetting visa or language-course costs that are conditional on the hire
- Not adjusting for failed hires—include searches that resulted in no placement
Frequently asked questions
- Is there a 'normal' Cost per Hire in Switzerland?
- No single standard exists. A small retail company might have Cost per Hire around CHF 1,500 (low Pensum, local hiring, no relocation). A tech SME recruiting engineers might see CHF 8,000–12,000. Industry, skill level, and canton wage norms all affect the number. Track your own baseline instead of chasing an external benchmark.
- Should I include the first-year salary in Cost per Hire?
- No. Cost per Hire measures only the recruiting process. The employee's salary is a separate business line item. Include recruiting costs—job boards, agencies, background checks, interview time—but not what you pay them to work.
- Do I have to report Cost per Hire to any Swiss authority?
- No legal obligation exists. This is an internal management metric. However, if you use recruiting data for analysis (e.g., counting candidates by gender), you must comply with revDSG (Swiss data protection law). Consult a lawyer if you plan to share or retain detailed recruiting analytics.
General information for Swiss employers, not legal advice. Have a lawyer confirm anything with legal consequences.