union-imgcross icon
skuad logo

Hire, pay and manage your talent in 160+ countries.


We respect your data. By submitting the form, you agree that we will contact you about our products and services, in accordance with our privacy policy.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

The cost of hiring a new employee: A comprehensive guide

Employer of Record

dot icon
Updated on:
April 11, 2024
dot icon

Updated on :

April 11, 2024
Hire International Employees at $199
Hire International Employees at $199
Start Hiring Now

Building a remote team?

Employ exceptional talent, anywhere, anytime!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
The cost of hiring a new employee: A comprehensive guide

As your business grows, so does the need to hire additional employees. While this is certainly an important investment in the future of your business, you may be surprised by how much it costs to bring new employees on board.

So, how much does it cost a company to hire someone? While it can be difficult to determine the exact amount, 2022 data from the Society for Human Resource Management (SHRM) indicates that the average cost per new employee hired was around $4,700. This figure can be even higher if it takes significant time, money, and other resources to market job postings, vet employees, spend time in interviews, and more.

Recruiting, hiring, onboarding, and training a new employee can be extremely costly. But it can also be a worthwhile investment. If you're wondering, "How much does it cost to hire a new employee?" read on to find out.

Factors that impact the cost of hiring new employees

If you have an open role (or three) at your company, you may be wondering: How much does it cost to hire an employee?

Whether you are conducting business remotely or in person, there are a number of considerations to keep in mind when looking to expand your team. Your hiring team must consider hard costs and soft costs. 

Hard costs - 

  • Job postings, 
  • Candidate screening, and 
  • Salary and benefits

Soft costs - 

  • Time lost vetting unqualified applicants,
  • Impact of an open position on others' job performance, and 
  • Time spent guiding a new employee to reach peak productivity

Here's a look at how much it costs to hire a new employee and the factors that impact this cost.

External HR team

Depending on the size of your business and the amount of funding you can allocate to human resources, you may find outsourcing your company's HR responsibilities beneficial. An external recruiter will likely charge a commission for new hires. Depending on the recruiter's experience, the job market in your area, and other factors, you can expect to pay a commission of 15% to 30% of your newly-hired employee's first-year salary.

A recruiter can make the answer to "how much does it cost to hire an employee" go up significantly — but it can also make the process much easier for you and the rest of your internal team.

Internal HR team

Most companies employ at least one in-house HR staffer, who may handle recruiting, onboarding, training, and other common HR tasks. Although this number may vary, the average HR specialist in the United States earns around $58,000 per year.

Job boards/Ad placements cost

Placing advertisements and posting open positions on online job boards are among the most fruitful recruitment methods. According to Jobvite's 2022 Job Seeker Nation Report, job boards are among the top places where candidates seek roles, with 59% using them to find new openings. The fees for these sites vary, but a reasonable expectation is to pay about $300 per month for each job posting.

Background checks

It is essential to run background checks on potential employees to ensure the accuracy of the information provided on their applications and each individual's suitability for the position. According to SHRM, although these costs are highly variable, a good rule of thumb is to expect a decent background check to cost less than a day's pay for the job position.

Training costs

Training a new employee can take a fair amount of time. This is especially true when the role requires specific skills or specialized knowledge. Some positions require weeks of training before the new employee can fully perform their duties. During the training period, your new employee will likely perform at less than optimal productivity. According to Training Magazine's 2022 Training Industry Report, companies spent an average of $1,207 per employee in training.

Employee salary and benefits

Your new employee's compensation package is one of the biggest hiring expenses. These costs can vary significantly depending on the job position, industry, company size, and location. According to the latest data from the U.S. Bureau of Labor Statistics, the estimated median annual wage in 2021 for a position requiring no formal education or college degree was $29,420, compared to $78,580 for a role requiring a bachelor's degree.

Referrals and other employee acquisition channels

In many cases, existing employees can refer promising candidates to your company, a valuable service for which you may consider offering a referral bonus. The average employee referral bonus is $2,500, although such bonuses may range between $1,000 to $5,000.

To learn more about the factors that impact hiring costs, speak with Skuad's team of experts today.

One platform to grow your global team

Hire and pay talent globally, the hassle -free way with Skuad

Talk to an experteor pattern

 Working from home avoids commuting, and fewer commuters result in 

 lower greenhouse gas emissions. 

Total cost of hiring a new employee

So, how much does it cost to hire a new employee? As you have learned throughout this article, hiring costs can vary significantly depending on several factors. Contact our experts to learn more about the cost of hiring new employees for your company. We can save the time and stress of onboarding new talent, allowing you to focus your efforts on other in-house projects.

How can you calculate the cost of hiring an employee?

While it can be difficult to estimate the total costs, you can instantly calculate the estimated total cost of employment in 160+ countries with Skuad's salary calculator.

Planning to hire international talent? Here is how Skuad can help

Skuad is a global employment and payroll platform that enables organizations to hire full-time employees and contractors in over 160 countries without setting up subsidiaries or legal entities. Skuad’s platform also helps organizations onboard talent, manage payroll, and ensure compliance with country-specific employment laws and tax regulations.

We manage your entire employment lifecycle so you can scale your business operations easily and compliantly.

To learn more about how Skuad can help your company, book a demo today.


What is the actual cost of hiring an employee?

If you've found yourself wondering, "How much does it cost to hire a new employee," the answer can vary.

The cost of hiring a new employee depends on several factors. This can include whether your company uses an external or an internal HR team, the cost of posting job positions online, the new employee's salary and benefits, and much more.

How do you calculate the cost of a new employee?

Try Skuad's salary calculator, which can help you instantly calculate the estimated total cost of employment in 160+ countries.

Is it cheaper to hire a new employee?

Although it is usually more cost-effective to retain an existing employee than to recruit, hire, onboard, and train a brand new one, there will be times when hiring someone new is inevitable.

About the author

Andrea Gomes is an acclaimed writer and expert in the Employer of Record (EOR) space, with over a decade of HR experience. Her work demystifies complex EOR concepts, guiding businesses on global workforce management and compliance.

Skuad is the best solution to hire and expand globally.

Skuad makes building globally distributed teams, quick and hassle-free.

Request demo
request demo img