For many founders and hiring leaders, the assumption is simple: if you handle hiring in-house, you’re saving money. But in reality, the numbers tell a different story.
Hiring well, and quickly, comes with significant costs. From vacant seat productivity loss to mis-hire churn, what looks like savings on paper can quietly turn into a budget drain. In this article, we break down the real cost of hiring, and how recruitment agencies can help scale-ups and small businesses spend smarter, not harder.
The Cost of Going It Alone
In-house hiring isn’t free. Even before a hire is made, the average cost-per-hire is around £3,500 (or $4,700) when you include advertising, internal admin, interview time and overheads [1]. For SMBs, that cost-to-impact ratio can sting, especially if you’re only hiring a few roles each year.
And that’s just the upfront cost. If a key role sits vacant for too long, productivity suffers. Research shows that each unfilled role can costs around $98 per day in lost output [2]. For sales or technical roles, the cost can exceed $500 per day [3].
That means a slow, 6-week hiring process could quietly cost your business £3,000–£10,000 in opportunity loss before your new hire even starts.
What Recruitment Agencies Really Cost
Agency fees typically range from 15–25% of a candidate’s salary [4]. While that may sound steep upfront, it replaces a lot: job boards, advertising, manual screening, and hours of your team’s time. Instead of spreading costs across internal salaries, tech, and time, you pay one fee that bundles everything.
Plus, agencies help you hire faster. In-house processes often take 45–60 days [2]; recruiters can cut that time down significantly [2]. Fewer vacancy days equals money saved. Some companies report up to 30% lower cost-per-hire using recruitment firms thanks to shorter cycles [5].
Avoiding Costly Mis-Hires
The cost of a bad hire can be eye-watering. Studies estimate it ranges from $14,000–$15,000 [1], with the total cost of a mis-hire hitting two times the salary once you account for ramp-up, lost time, and the cost to re-hire.
Agencies reduce this risk by improving the quality of each hire. According to staffing benchmarks, agency-sourced candidates deliver ~40% stronger candidate quality and ~25% higher retention rates [5].
That’s not just better outcomes – it’s fewer repeat hiring cycles, saving time and thousands in avoidable costs.
Why This Matters for Growing Teams
If you’re a founder or leader at an early-stage company, your hiring is likely intermittent. You might not need a full-time in-house recruiter – and hiring through your GTM leaders pulls them away from revenue-driving work.
Recruitment agencies offer on-demand support. You don’t carry a fixed headcount or tools. You get hiring momentum only when needed.
For high-growth, lean teams, this “pay for success” model helps you scale more predictably and budget more cleanly.
Don’t judge a recruitment fee in isolation. Judge it by what it saves you: time, distraction, cost of delay, and risk of churn.
When you factor in speed, better-fit hires, and fewer misfires, recruiters often pay for themselves.
Hiring isn’t about what you spend, it’s about what you get back.
References
[1] SHRM (2022). “Cost-per-Hire Metrics Benchmarking Report.” shrm.org
[2] Altline by Southern Bank (2023). “Average Cost of Vacancy.” altline.sobanco.com
[3] Interex Group (2024). “The Hidden Cost of Open Roles.” interex-group.com
[4] Fountain (2024). “Recruitment ROI for High-Growth Teams.” fountain.com
[5] Staffing Industry Analysts (2023). “Staffing Firm Performance Benchmarks.” staffingindustry.com
[6] Robert Half (2023). “Hiring Trends Report.” roberthalf.com
