How to evaluate the true cost of hiring an employee

Do you know your cost per hire — what it really costs to identify, recruit and bring a new employee onto your team? Understanding CPH can make your hiring process more efficient and targeted, which helps inform your budgeting process and leads to smarter hiring decisions.

CPH is the No. 1 human resources metric for 47 percent of businesses with five to 19 employees, and for 54 percent of businesses with 20 to 49 employees, according to the 2026 Business Leaders Priorities survey conducted by Paychex, a leading payroll and HR firm. Arriving at your CPH is a straightforward calculation derived by combining internal and external costs and dividing by the number of hires in a certain period.

Internal costs include a few imprecise areas, such as time lost during the interviewing, onboarding and training periods, as well as lost productivity. These costs will need to be estimated. External costs are more quantifiable: advertising, agency fees, background checks and incentives such as referral bonuses.

Let’s say you spent an average of 10 hours finding and bringing up to speed a new employee in 2025. And that you or a member of your crew spent another 10 hours training over the course of the new hire’s first three months. And don’t forget the time required by your HR or personnel folks onboarding, maybe another two hours. Then add any external costs for advertising, vetting, referrals. And that’s just for one new hire. Maybe you hired five new team members in 2025.

Add it all up … you may be surprised.

Whatever your CPH, most labor experts agree that it’s more cost-effective to retain existing employees than to churn through the hiring process multiple times per year. Turnover costs obviously multiply with each new hire.

A 2022 Golf Course Industry survey found that 24 percent of employees stayed on the job for one to five years, 37 percent for six to 10 years, 23 percent for 11 to 15 years, 12 percent for 16 to 20 years and four percent for more than 20 years. The superintendents at the high end of that range are obviously doing something right when it comes to retention.

Retention starts with hiring employees who are the right fit for the position. After that comes the real work, which includes:

• Frequent development discussions to keep your staff focused. These meetings — one-on-one or with the entire team — need not be held every day, but they should be held on a regular and consistent basis. Keeping everyone focused and motivated enables continuous improvement.

• Being aware of the career goals of each crew member builds commitment. So many people have a job where they work for a boss who knows little to nothing about them. Get to know what inspires your team members and what they aspire to in their careers. Make it your business to understand their hopes and dreams, and you’ll see commitment levels continue to grow.

• Formal development plans make career growth real. Sit down with each member of your team at least a couple times each year to collaborate on a development plan. Discuss the knowledge and experience required for the next step in their development. Agree on how and when those steps will take place. Then commit those plans to a written document that can be referred to at each discussion opportunity. Keeping score makes professional development more engaging and helps you and your team members celebrate even the smallest steps.

• Pushing your team to learn, grow and contribute makes you the kind of manager everyone wants to work for. Asking more of your staff shows that you believe in them and in their potential. Pushing should come across as constructive and consistent, and should never feel punishing. Being a people builder requires that you understand wants, needs and aspirations, and that you are consistently supportive. In these kinds of workplace cultures, creativity and initiative flourish.

Retaining your top-performing crew members requires a multitude of skills. Managers must be a willing partner in their development, an engaged communicator and often a cheerleader. Crews need to see their superintendent as an impartial coach and passionate leader dedicated to their success and well-being.

In turn, most employees will repay a superintendent’s investment in them with years of dedicated service.