What Does It Cost to Hire Someone? Cost-per-Hire for Startups in 2026

Cost per hire is (external costs + internal costs) ÷ hires, the SHRM/ANSI formula; SHRM's benchmark average is about $4,700 per hire across employers of every size, a startup hiring through a contingency agency pays $15,000–25,000 in fees alone on a $100,000 salary, and lemonly charges $8,000 flat per hire.

That is the short version. The rest of this guide gives you the formula with every line item named, the published benchmarks with their dates and sample sizes attached (and the reasons they disagree with each other), a table of what one hire costs by method, three worked examples for a $100,000 engineer, and the costs the formula deliberately leaves out.

The cost-per-hire formula

Cost per hire = (total external costs + total internal costs) ÷ total hires in the period. That is the definition in the ANSI/SHRM cost-per-hire standard (ANSI/SHRM 06001.2012), and it is the only version of the metric with a stated method, so it is the one to use when you want your number to mean the same thing as anyone else's.

External costs are the invoices: agency or recruiter fees, job-board and sponsored-post spend, sourcing tools and applicant tracking software, assessments, background checks, relocation, and sign-on bonuses.

Internal costs are the hours: the share of any in-house recruiter's or sourcer's salary that went to the hire, the hiring manager's time, every interviewer's time, coordination, and referral bonuses paid to your own staff. This is the half most startups leave at zero, and it is usually the larger half.

What the formula excludes on purpose: the cost of the seat sitting empty and the productivity lost while the new person ramps up. The standard treats those as separate metrics, so a cost-per-hire figure never tells you what a slow search cost you. We come back to that below.

What the benchmarks say, and why they disagree

The most quoted figure is SHRM's: the average cost per hire was nearly $4,700, from an April 2022 SHRM article restating its benchmarking data. The same article carries a practitioner estimate that the total cost of a hire, once the soft costs are counted, can run three to four times the position's salary, and that hard costs are only 30–40% of the total. Both are attributed to Edie Goldberg of E.L. Goldberg & Associates, an estimate rather than a measurement, which is why we quote it as one.

SHRM's current benchmarking cycle, drawn from over 4,600 organizations, publishes direction rather than dollars on its public page: executive cost per hire increased, non-executive cost per hire stayed relatively stable. Any 2025 or 2026 SHRM dollar figure you find on a blog is second-hand; SHRM has not put one on its own site. An older SHRM benchmarking report put the average at $4,129 in 2016, and that number now circulates on Canadian staffing sites as a Canadian figure. It is SHRM's US average from a decade ago.

The benchmarks disagree for three reasons, and none of them is that one publisher is wrong. First, the inputs differ: most companies feeding a survey count the invoices and skip the hours, so the averages understate the true number by roughly the internal half. Second, the mix differs: an average across retail, manufacturing and enterprise hiring says little about a startup making one senior hire, where the agency fee alone is three to five times the all-industry average. Third, the vintage differs: a 2016 or 2022 figure is republished each year as if it were current, usually without the date.

Cost per hire by hiring method

For a startup, the method decides the number. The same $100,000 hire costs very different amounts depending on who does the finding, and on how many of your own hours the method consumes.

The fee ranges are the 2026 market figures from our recruiter cost guide; the LinkedIn Recruiter and job-board lines are from our LinkedIn Recruiter and LinkedIn Jobs comparisons; lemonly's fee is on the pricing page. The last column is the one to read twice. A method with no fee still has a cost per hire, and it is paid in the currency a founder has least of.

The costs the formula leaves out

The empty seat. Cost per hire says nothing about how long the search took, and in 2026 it takes a while: median time-to-fill is 39 days for non-executive roles in SHRM's benchmarking and 60 days across Greenhouse's customer base, with senior technical roles running longer still. Every one of those days is a salary's worth of work not being done. Our time-to-hire benchmarks page has the full set with definitions and dates.

The bad hire. You will read on hundreds of HR sites that the US Department of Labor puts the cost of a bad hire at 30% of first-year earnings. We looked for the Department of Labor document that says so and could not find one, and neither, as far as we can tell, has anyone who quotes it. There is no well-sourced universal number here. What you can price is your own case: a hire that fails inside the first few months costs you the search a second time, so the guarantee terms of whichever method you choose belong in the calculation. Most agencies offer 30–90 days; lemonly's is a 90-day refund or replacement.

Your own time, priced honestly. Founders price their hours at zero and then wonder why the "free" search cost the quarter. Put a rate on them. If you would not pay a contractor less than $150 an hour to do your job, that is the floor for the hours you spend screening.

Three worked examples

One hire: a $100,000 engineer. Internal hours are priced at $150 an hour throughout, an assumption stated so you can swap in your own.

1. Through a contingency agency at 20%. External: $20,000 fee. Internal: the agency sends candidates in batches, so call it 20 team-hours across feedback rounds and interviews, $3,000. Cost per hire: $23,000.

2. Do it yourself with a sponsored post. External: $3,000 of job-board spend, mid-range for a sponsored post. Internal: a search that runs six weeks consumes on the order of a hundred founder-hours of sourcing, screening and interviewing, $15,000. Cost per hire: $18,000, and none of it shows up on an invoice.

3. Through lemonly. External: $8,000 flat, due only when you hire. Internal: you meet only candidates our recruiters have already interviewed, so call it 10 team-hours, $1,500. Cost per hire: $9,500.

Change the hourly rate or the hours and the ranking holds, because the agency number is dominated by the fee and the DIY number by the hours. The only way the do-it-yourself route wins on cost is if your time is worth less than the fee it replaces, which for a founder is rarely true. Run your own salary through the cost calculator to see the fee side for your hiring plan.

Find the talent you're looking for

lemonly delivers qualified candidates on-demand. Find out how.

Book A Demo

Pick a time for your demo on the next page.

How we calculated

The formula is the ANSI/SHRM cost-per-hire standard. The $4,700 average is from SHRM's April 2022 article; the $4,129 figure from SHRM's 2016 benchmarking report; the direction-only statement from SHRM's current benchmarking page, all re-checked in September 2026. Fee percentages are the published 2026 ranges collected in our recruiter cost guide. Time-to-fill figures are SHRM (median, non-executive) and Greenhouse (mean, 2025). The $150-an-hour rate and the hour counts in the worked examples are assumptions, labelled as such. We did not use the "30% of first-year earnings" bad-hire figure because no primary source for it exists, and we left out replacement-cost studies we could not read in the original this month.

Key takeaways

• Cost per hire = (external + internal costs) ÷ hires. Count the hours, or the number is half a number.
• The published average is about $4,700 (SHRM), across every industry and role level; a startup's agency-made senior hire runs three to five times that in fees alone.
• Method sets the number. On a $100,000 hire: $15,000–25,000 through a contingency agency, $25,000–35,000 retained, $8,000 flat with lemonly.
• "Free" is the expensive one. A hundred founder-hours at $150 is $15,000 before a single job-board dollar.
• The formula ignores the empty seat and the bad hire. Price the vacancy from the time-to-hire benchmarks and read the guarantee before you sign.