Cost per hire is the total spend a company carries to bring one person on board, divided by the number of hires. This calculator covers job ads, recruiter fees, panel time, background checks, onboarding documents, and equipment, so the number you see is closer to the real one.
Most SME founders quote the job board fee and stop there. The honest figure is usually three to four times that, once internal hours and onboarding paperwork are counted.
| Sourcing and job ads | ₹0 |
| Recruiter or agency | ₹0 |
| Internal HR time | ₹0 |
| Interview panel time | ₹0 |
| Background verification | ₹0 |
| Documents and onboarding | ₹0 |
| Equipment and setup | ₹0 |
| Total per hire | ₹0 |
The Formula
Cost per hire is a ledger problem, not a clever one. Add every rupee spent acquiring people in a period, then divide by the number of hires you closed in that same period. The accepted definition adds external costs and internal costs together, then averages over the hires completed.
The arithmetic is easy. The discipline is in counting things people forget. Founder hours in shortlisting, the cost of a Friday afternoon spent on interviews, paperwork redone because the offer letter missed a clause, the kit that sat on a desk for two weeks waiting for joining. Those are the line items this calculator is built around.
The Ledger
If a number is missing from the count, the cost per hire reads cheaper than it is. The list below mirrors the inputs in the calculator.
Naukri or LinkedIn job slots, premium listings, referral bonuses paid out, the time spent posting and reposting. Spread the period cost across hires closed in that window.
Indian SMEs that use a recruiter usually pay one month to two months of CTC per closed role. If you closed two roles through an agency this quarter, divide the commission across only those two hires, not the full set.
Screening, scheduling, calling references, salary negotiation. The most omitted bucket. Count the hours honestly, then multiply by what one hour of that person's time actually costs the company.
Each interview round pulls two to three people away from their work. Three rounds, three interviewers, an hour each. That is nine billable hours of senior time per finalist, often more for technical roles.
BGV vendors in India charge from around ₹500 for a basic check to ₹3,000 for a full pack with education, employment, criminal, and address. SMEs often skip this and discover the gap during separation.
Offer letter, appointment letter, annexure on compensation, confidentiality undertaking, policy acknowledgements, the first month payslip. When drafted manually or through a consultant, this stack runs to several hours and often a four figure invoice per hire.
Laptop, mouse and keyboard, screen, software seats, ID card, courier of the kit if remote. One time spend that should sit in cost per hire, not in IT opex, so the real picture shows up.
Optional and harder to pin down, so it is not in the calculator inputs. A reasonable rule of thumb is fifty percent of the first month salary, since most new hires take four to eight weeks to reach steady output. Add it as a mental adjustment if you want a fuller number.
What to do with the number
A single cost per hire figure on its own is just bookkeeping. The value sits in three things you can do once the number is honest. First, set a benchmark for next quarter and watch it move. Second, look at the breakdown and see which bucket is doing the heavy lifting. Third, compare cost per hire to the annual CTC of the role. A useful sanity check: cost per hire above 15 percent of annual CTC is on the high side for an SME, unless the role is senior or specialised.
If agency fees are most of your number, your top of funnel is the lever. Build a referral programme, run a careers page that does some of the work, set up a Naukri or LinkedIn cadence. If documents and onboarding are punching above their weight, that is a tooling problem with a quick fix. If panel hours are dominant, your screening is bringing too many wrong shortlists to senior people.
The other read is across roles. The cost per hire for a junior associate should not be the same as for an engineering manager. If they are, something is overspent on one and underspent on the other. Splitting the calculation by role band, even roughly, makes the lever clearer.
The Document Portion
Offrd is the part of the ledger we can directly affect. Offer letters, appointment letters, payslips, onboarding kits, policies, full and final settlement. The platform generates each at ₹99 per document, with 50 free credits on signup. Indian statutory rules for EPF, ESI, professional tax, and gratuity are built in, so the math under each letter is right by default.
For an SME closing four hires in a quarter, the document bucket falls from a four figure consultant invoice per hire to a low three figure software cost across all four. The compounding effect comes from policy generation, attendance, leave, and exit documents using the same platform, which trims the recurring HR document spend across the year, not only the joining moment.
| Approach | Per letter cost | Notes |
|---|---|---|
| CA or HR consultant | ₹500 to ₹2,000 | Turnaround in days, manual statutory math, version drift across letters |
| Word and Excel templates | Free in cash, costly in hours | No audit trail, no statutory engine, every letter is a fresh edit |
| Offrd | ₹99 per document | 50 free credits on signup, setup under 2 minutes, EPF and ESI built in |
Offrd is in use at more than 4,000 Indian companies across 350+ cities. Atndnz, the attendance and leave companion, is bundled free for paying Offrd users, which keeps the attendance bucket out of the per hire calculation.
FAQ
50 free credits on signup. Setup under 2 minutes. No card needed.
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