What is included in the Cost per Hire calculation?

The Cost per Hire calculation provides a comprehensive view of the total expenses associated with recruiting a new employee. It includes all expenses related to the recruitment process, such as advertising costs, agency fees, employee referral bonuses, recruiter salaries, and any other costs incurred for hiring. This total is then divided by the number of hires made during a specific period, which yields the average cost incurred to recruit each new employee.

Including total recruitment costs ensures that organizations gain insights into how efficiently they are hiring and helps to budget future hiring needs. This information is critical for evaluating the return on investment in recruitment strategies and making informed decisions about future hiring practices. By focusing solely on salaries or advertising costs, as in the other answer choices, a limited perspective on hiring expenses is presented, which can lead to incomplete understanding and potentially misguided recruitment strategies.