How Much Does Recruitment Really Cost? An Honest Guide for UK Businesses

One of the first objections recruiters often hear is the cost. Some companies have had bad experiences with agencies, others have benefited from a few lucky free hires or recommendations, and some genuinely believe recruitment isn’t worth the investment.

So, “How much does recruitment really cost?”

It’s a fair question, and the answer isn’t always straightforward. Some costs are obvious, while others are hidden. In this guide, we’ll break down recruitment costs so you can make informed decisions for your business.

The True Cost of Hiring

When calculating recruitment costs in the UK, there are two main approaches:

1️⃣ Hiring Directly (In-House Recruitment)

Managing recruitment in-house may seem cost-effective, but there are several expenses to consider:

• Job board adverts: Posting on sites like Indeed, Reed, or LinkedIn can cost £300–£1,000 depending on reach.

• Time investment: Screening CVs, interviewing candidates, and managing admin can take hours or days from your team.

• Recruitment software or systems: Applicant tracking systems, background checks, and onboarding tools.

• Expertise: If you don’t have an HR team or internal talent acquisition experience, the process can be inefficient and costly.

💡 Hidden cost: Your time and resources. A wrong hire could mean restarting the recruitment process, dramatically increasing costs.

2️⃣ Using a Recruitment Agency

Recruitment agency fees are usually a percentage of the candidate’s first-year salary — typically 15–25% for permanent hires. Temporary or contract roles often carry an hourly rate.

What this fee covers:

• Sourcing talent: Access to candidates you won’t reach through adverts. Agencies proactively search across all major job boards and maintain exclusive databases.

• Screening & interviewing: Filtering CVs, checking references, and pre-interviewing candidates.

• Market expertise: Providing insights on salaries, candidate availability, and market competition.

• Reduced risk: Many agencies offer guarantees or rebates if a hire doesn’t work out.

• 
  

💡 Hidden value: Agencies often save you time and reduce the risk of a costly wrong hire, which can cost 3–4x the employee’s salary when factoring in training, lost productivity, and rehiring.

Hidden Costs You Might Overlook

When evaluating recruitment cost, it’s not just about fees:

• Delays: Every month without the right hire can slow growth or overburden your team.

• Wrong hires: A bad hire is far more expensive than the initial recruitment fee.

• Time: Leadership or HR teams could be focusing on revenue-generating work instead of CV-sifting.

• 
  

How to Calculate Recruitment Costs

To estimate the true cost of hiring for your business:

1. Include direct expenses: advertising, recruitment software, and agency fees.

2. Factor in time spent by staff on recruitment tasks.

3. Consider hidden costs: bad hires, delayed projects, or lost revenue.

4. Factor in the missed opportunity of not hiring the best candidate available at the time.

   
   

This approach helps you make smarter decisions about whether to recruit in-house or use a recruitment agency.

Why Choosing the Right Recruitment Approach Saves Money

Recruitment isn’t just about filling a role — it’s about finding the right candidate who stays, grows, and adds value.

The question isn’t just: "What does recruitment cost?”

It’s: “What does it cost if we don’t get this hire right?”

📩 If you’d like an honest conversation about recruitment costs in the UK and how to avoid expensive hiring mistakes, get in touch with our team on 01246 208301. We provide clear, practical advice without the hard sell!