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Cost per hire (CPH) is the total you spend to fill a role, divided by hires in the same period. For engineering roles, that number runs well above the national average. In-house, the cost to hire a software engineer often lands near $9,000 in recruiting spend and team time.
The reason is time. Engineering hires need more specialized sourcing and longer interview loops. The in-house figure also hides a cost most teams leave out: the hours engineers spend in interviews.
If you lead an engineering team, CPH tells you what your hiring process costs before a new engineer writes code. It does not tell you whether that process works.
This guide covers the cost per hire formula, what to count, and a worked example. It then compares an in-house US hire with a staffing agency that places engineers from Latin America, role by role.
What Does Cost per Hire Measure for Engineering Roles?
CPH measures what it takes to move an engineer from open req to signed offer. It covers external recruiting costs and the time your own team spends hiring. It leaves out salary, benefits, and onboarding after day one.
That boundary matters to engineering leaders. A low CPH can hide a slow process or a weak hire. A high one can be worth it if the engineer ships in week two.
Read it next to time to hire and quality of hire. Only 20% of organizations track quality of hire, according to SHRM’s 2025 benchmarking survey. Most teams cut hiring costs without seeing what they trade away.
What Is the Cost per Hire Formula?
The standard cost per hire formula comes from the ANSI/SHRM cost-per-hire standard. Add internal and external recruiting costs for a period, then divide by the hires in that period.
Cost per hire = (Internal recruiting costs + External recruiting costs) ÷ Total hires in the period
Internal recruiting costs are what you spend inside the company: recruiter pay, interviewer time, and tools. External recruiting costs go to outside vendors:
- Agency fees,
- Job ads,
- Assessments, and
- Background checks.
Two rules keep the result honest. Use the same period for costs and hires, usually a quarter. Calculate engineering apart from other teams, because blended averages hide where the budget goes.
Which Recruiting Costs Go Into an Engineering Cost per Hire?
For engineering roles, the largest internal cost is usually your engineers’ time, not your recruiters’. Technical loops include screens, live coding, system design, and debriefs. The people running them would otherwise be shipping product.
| Cost | Type | What to count | Why it weighs more in engineering |
|---|---|---|---|
| Interviewer time | Internal | Hours in screens, technical rounds, take-home reviews, and debriefs × loaded hourly cost | Gem counts 26 interviewer hours per technical hire |
| Hiring manager time | Internal | Intake, calibration, final rounds, and offer calls | Engineering managers own the bar and the close |
| Recruiter and coordinator time | Internal | Sourcing, screening, and scheduling, allocated per hire | Technical roles need more outreach per hire |
| Recruiting tools | Internal | ATS, sourcing seats, and coding assessment platforms, prorated by hires | Assessment tools are specific to technical hiring |
| Agency or search fees | External | Contingency or retained fees | Usually 20% to 30% of first-year salary |
| Job ads and sourcing | External | Job boards, sponsored posts, and events | Inbound volume is high, but inbound quality is low |
| Background and reference checks | External | Third-party screening vendors | Same as other roles |
| Referral bonuses | External | Bonuses paid for hires in the period | Common in engineering, often larger |
Price people’s time at loaded cost, not base salary. Benefits make up 31.5% of compensation costs for full-time private-industry workers, per BLS data for June 2026. A quick loaded hourly rate is base salary ÷ 0.685 ÷ 2,080 hours.
Sign-on bonuses and relocation are a judgment call. Some teams include them, and others report them apart. Pick one rule and keep it, or your quarter-over-quarter trend stops meaning anything.
How Much Does It Cost to Hire a Senior Software Engineer In-House? A Worked Example
Here is the full CPH for one senior backend engineer hired in-house in the US, with a $150,000 base salary. Engineering hourly rates use BLS median pay, loaded at ÷ 0.685 ÷ 2,080 hours. Hours, tools, and ad spend are assumptions to replace with your own data.
| Line item | Basis | In-house US hire |
|---|---|---|
| Recruiter time | 40 hrs × $77.20/hr ($110,000 salary, loaded) | $3,088 |
| Interviewer time | 26 hrs × $95.44/hr (BLS software developer median, $135,980) | $2,481 |
| Hiring manager time | 10 hrs × $122.92/hr (BLS IT manager median, $175,140) | $1,229 |
| Tools | $30,000 per year in ATS, sourcing, and assessments ÷ 20 hires | $1,500 |
| Job ads | Sponsored posts for the role | $800 |
| Background check | Third-party vendor | $150 |
| Cost per hire | One-time | $9,249 |
| Base salary | Year one | $150,000 |
| Benefits and payroll taxes | 31.5% of loaded cost, per BLS (full-time workers) | $68,978 |
| First-year cost per engineer | Cost per hire + salary + benefits | $228,227 |
The in-house result is 1.7 times SHRM’s nonexecutive average, and engineering time makes up 40% of it. Interviewer hours per hire include every candidate who did not get an offer. If your loop rejects four finalists per hire, their hours count toward the hire you made.
The Costs That Keep Adding Up After the Offer
The $228,227 first-year total is the best case. Two risks push it higher. Every month the seat stays open costs about $16,500 in work not shipped, at the BLS median. And if the engineer leaves early, you pay the full cost per hire again and restart the vacancy clock.
Year two still costs $218,978 in salary and benefits, before raises. Over two years, one in-house senior engineer comes to about $447,200.
How Does an In-House Hire Compare to a Staffing Agency With Latin American Engineers?
Many US teams now hire engineers through staffing agencies that work with Latin American talent. The agency sources, vets, and employs the engineer, and your team runs only the final interviews. Two parts of the math change: the salary base and who pays for recruiting.
| Factor | In-house US hire | Staffing agency, LATAM engineer |
|---|---|---|
| Cost per hire | $9,249 | About $628 (final interviews only) |
| Recruiter hours per hire | 40 | 0 |
| Interviewer and manager hours | 36 | 6 |
| First-year cost | $228,227 | About $108,600 |
| Two-year cost | About $447,200 | About $216,600 |
| If the engineer leaves early | You pay cost per hire again and restart the search | The agency replaces the engineer within the monthly rate |
| Time zone | Local | US-compatible, with most of the workday shared |
In this example, the agency hire costs about 52% less, both in year one and over two years. The LATAM column assumes an all-in senior rate of $9,000 a month, which covers salary, benefits, payroll, and replacements. That sits near the top of the typical $6,750 to $9,100 range. Rates change by country, stack, and seniority, as our breakdown of nearshore software development rates shows.
What the Savings Depend On
Two conditions decide whether the savings hold. The first is vetting depth: if the agency’s technical screens are thin, your engineers redo them, and interviewer hours return. The second is overlap with your workday, because interviews and onboarding happen in real time.
Latin American engineers work in US-compatible time zones, so loops run on the same schedule as a domestic search. An agency with deep technical vetting covers the first condition.
What Is the Average Cost per Hire for Engineering Roles?
Cost per hire changes with the role you hire for. The table below covers ten of the most common engineering roles. US figures use Glassdoor’s median total pay, and LATAM figures use all-in staffing agency rates.
In-house cost per hire stays near $9,200 for every role in this model, since the interview loop is the same. Salary is what separates the roles, and it is also where the LATAM gap opens. A senior LATAM engineer through a staffing agency costs about $81,600 to $109,800 in year one, across roles and countries.
| Engineering role | US median total pay (Glassdoor, 2026) | First-year cost, US in-house hire | Year-one savings with a LATAM engineer |
|---|---|---|---|
| Python developer | $130,000 | $199,030 | 45% to 59% |
| Java developer | $119,000 | $182,971 | 40% to 55% |
| Node.js developer | $144,000 | $219,468 | 50% to 63% |
| React developer | $121,000 | $185,891 | 41% to 56% |
| iOS developer | $136,000 | $207,789 | 47% to 61% |
| Android developer | $107,000 | $165,453 | 34% to 51% |
| DevOps engineer | $144,000 | $219,468 | 50% to 63% |
| Data engineer | $131,000 | $200,490 | 45% to 59% |
| Machine learning engineer | $159,000 | $241,366 | 54% to 66% |
| QA automation engineer | $117,000 | $180,052 | 39% to 55% |
A LATAM engineer costs roughly 35% to 65% less in year one. The gap is widest where US salaries run highest: machine learning, Node.js, DevOps, and iOS.
Funnel width adds cost the table does not capture. Gem’s 2026 hiring data puts the application-to-hire rate at 0.2% for engineering and 0.1% for data science. The average across all functions is 0.5%. Narrow funnels raise in-house sourcing hours, which an agency with an existing talent pool absorbs.
US figures are Glassdoor medians across experience levels and include bonuses, so senior hires cost more. For a wider view of salaries by role, see our ranking of the highest-paying coding jobs. The LATAM range covers senior engineers across roles and countries, plus final-interview time.
How Engineering Compares to the Overall Benchmark
For reference, SHRM’s 2025 benchmarking survey of 2,371 HR members sets the general benchmark. It puts average cost per hire at $5,475 for nonexecutive roles and $35,879 for executive roles.
Engineering sits above that average for three reasons. Loops run longer: Gem’s benchmarks count 35 to 36 interviews per technical hire, versus 22 to 24 elsewhere. The people running those loops earn more, and specialized sourcing takes longer.
Benchmark Engineering CPH Against Your Own Baseline
An industry average tells you whether you are far off. Your own trend tells you whether you are improving. Track engineering CPH each quarter, split by seniority and by source:
- Referral,
- Sourced,
- Inbound, and
- Agency.
How Does Cost per Hire Compare to Cost of Vacancy and Quality of Hire?
CPH is one of three numbers that decide whether a hiring process works. Cutting it alone often makes the other two worse.
| Metric | What it answers | How to estimate it for an engineer |
|---|---|---|
| Cost per hire | What did it cost to fill the seat? | The formula above |
| Cost of vacancy | What does an empty seat cost each month? | Loaded annual cost of the role ÷ 12, as a floor for the value of work not shipped |
| Quality of hire | Did the hire deliver? | Ramp time to first production release, performance at 6 months, and 12-month retention |
Cost of vacancy puts CPH in proportion. An engineer at the BLS median carries a loaded cost of about $198,500 a year, or roughly $16,500 a month. A process that adds 30 days to save money loses more than the $9,249 in-house CPH from the example.
Quality of hire is the other side. An engineer who leaves at month four sends you back to the start, and you pay twice. We break down that math in the cost of a bad engineering hire.
What Are the Most Common Cost per Hire Mistakes in Engineering Teams?
Most errors make the number look lower than it is. These six show up most often.
- Counting only invoices. Finance reports show agency fees and job ads. They do not show interviewer time, which Gem’s 2026 data puts at 26 hours per technical hire.
- Pricing time at base salary. Base pay leaves out benefits and payroll taxes. Use loaded cost, or each internal hour comes in close to a third low.
- Blending all departments. Company-wide spend divided by company-wide hires buries engineering inside cheaper roles. Calculate by function and by seniority.
- Mismatching periods. A search that starts in Q1 and closes in Q2 belongs to the quarter of the hire.
- Ignoring failed searches. A req that closes without a hire still used hours and budget. Add those recruiting costs to the hires you did make.
- Comparing yourself to the SHRM average. That figure covers every nonexecutive role. Sitting above it does not mean your engineering process is expensive.
How Can You Lower Engineering Cost per Hire Without Lowering the Bar?
The largest savings come from fewer wasted interview hours, whoever runs the search. Gem reports that interviews per hire rose 33% since 2021, so most loops have room to shrink.
Cut Interview Rounds That Do Not Change Decisions
Review your last 20 hires and rejections. If a round almost never flips the result of the round before it, merge or drop it. Each remaining round should test one signal the others do not.
Screen Out Mismatches Before Engineers Get Involved
Every unqualified candidate who reaches a technical round costs your team hours. A precise software engineer job description, a short async screen, and a recruiter who knows the stack move rejections earlier.
Source and Rediscover Instead of Posting and Waiting
Gem found that sourced candidates are 8 times more likely to be hired than inbound applicants. It also found that 46% of sourced hires were already in the company’s ATS or CRM. Your past finalists are the cheapest pipeline you have.
Bring In a Recruiting Partner Where It Saves Time
A recruiting partner pays off fastest where your team is slowest. That usually means senior and specialist roles, new stacks, or several hires at once. It also frees engineers from early screens, because the partner vets candidates before your team meets them. Our guide to tech recruiting covers the full process behind these choices.
How Does Cost per Hire Change by Hiring Model?
Each hiring model moves cost to a different place, so CPH alone cannot rank them. Staff augmentation shows almost no upfront cost, because recruiting is built into the monthly rate.
| Hiring model | Upfront cost per hire | First-year cost per senior engineer | Two-year cost | What your team still spends |
|---|---|---|---|---|
| In-house recruiting | $9,249 | $228,227 | About $447,200 | Recruiter, interviewer, and manager time |
| Contingency recruiting agency (20% to 25%) | $36,133 to $43,633 | $255,111 to $262,611 | About $474,100 to $481,600 | Interviewer and manager time |
| Recruitment-only partner (fee near 3 months of salary) | About $41,400 | About $260,300 | About $479,300 | Final-round interviews only |
| Staffing agency with LATAM engineers | About $628 | About $108,600 | About $216,600 | Final-round interviews only |
The first three rows assume a US hire at a $150,000 base salary, as in the worked example. The last row uses the same $9,000 monthly rate as the comparison above. Over two years, it costs about half of any US-based option. Our guide to software developer cost breaks down those totals by model and seniority.
Track the Full Cost of Every Engineering Hire
Engineering CPH runs well above the $5,475 SHRM average. Technical loops use senior engineering time, and specialized sourcing takes longer. Count interviewer hours at loaded cost, and weigh any fee against the cost of an empty seat. Over two years, a staffing agency with Latin American engineers costs about half of an in-house US hire.
Hiring a senior engineer this quarter? Check the full cost to hire a software engineer before you open the search. The BEON.tech developer cost calculator shows the all-in monthly cost of a pre-vetted Latin American engineer. No placement or replacement fees apply.
