The hidden costs of recruitment

In today’s competitive job market, recruiting staff can be a difficult and time-consuming task. With the ever-increasing demand for skilled workers, organisations need to get creative when it comes to finding the right people to fill their open positions. However, there are many issues that may arise when recruiting staff, such as difficulty finding qualified candidates, and the time and cost associated with the hiring process. To compound the issue, in a recent LinkedIn survey 50% of talent professionals said their budgets had reduced year-on-year since 2020, making hiring even more of a challenge.

This issue is exacerbated further where businesses may not possess the in-house skills to recruit staff such as in the SME, start-up and not-for-profit business sectors. In such a scenario businesses are left with two options:

Firstly, they can try to do it themselves. Generally, this involves, writing a job description (with the right level of skill to attract potential candidates), posting it on job sites such as Indeed or LinkedIn, vetting, interviewing and negotiating themselves. This can be seriously risky and expensive, with the average visible cost of self-hiring in 2022 reported to be in the region of £4000.

But invisible costs to this method are much greater. Costs such as manager’s taking time out of their schedule to screen CVs, interview, and train new hires, and a considerable cost to the business just waiting for someone to be hired when often employees will be doing the work of two people while seeking an addition to the team.

While these might not seem to directly impact a company’s bank balance, the effect on the productivity level is almost always a costly one. This is truest when there is pressure to hire, and the wrong person is offered the job.

Harvard Business discovered that it takes on average 5 months for a new employee to reach full productivity. That’s a years worth of lost productivity if you hire the wrong person and have to do it again!


Hidden costs for self-hire are estimated to be £5,000 -15,000, with 50% of new hires leaving within the first 12 months on average.


What’s worse is that recent studies suggest that over three quarters of in-house recruitment solutions fail to source 90% of their vacancies themselves. This may be down to the lack of skillset, as well as the wider remit requirements such as marketing their brand, updating the careers page on their website and the time/cost of making their own shortlists amongst their normal day-to-day job requirements. So what is the cost to the business if you try it yourself and then have to give up?

In comparison, agencies source successful candidates on average 2–4 weeks quicker than in-house recruitment teams. So the second option available to businesses without the inhouse recruitment skills is to use an outside recruitment firm. A recruiter will help the business advertise, collect and shortlist CV’s which saves the business time and money. There is a significant amount of work involved in this collecting process – census data shows that the majority of people who took a new job last year weren’t actually searching for one: Somebody approached them. For this reason, recruitment firms can charge staggering percentages, sometimes as high as 25% of a new hire’s starting salary. The average salary for vacancies recruitment agencies are asked to assist with is £40,000 and the UK average recruitment fee is 15%. That percentage rises for more senior or more skilled positions so it is not uncommon for firms to be paying recruiters upwards of £15,000-20,000 for each hire.

Businesses therefore have considerable problems with hiring (and keeping) the right employees whilst also being mindful of their budgets. This is perhaps why the British Chamber of Commerce has reported that in 2022 61% of firms were seeking staff, and of those, 76% were reporting difficulties in finding the right employees.

It seems clear then that businesses without their own hiring teams would do better to bring in third-party assistance when recruiting, simply to minimise any adverse effects on their existing business, but must also remain mindful of cost. Unlike typical recruitment agencies, Thrive offers a cost-efficient model, charging a fixed rate (charged per half-day), rather than an enormous commission fee. We can provide end-to-end assistance, from help with writing a job ad to assistance with interviewing and offer negotiation, along with all the standard services in between that you would expect from a recruiter. Clients can pick and choose what they want help with and are not tied into expensive contracts. In this way Thrive becomes an extension of the client’s own business, working with them to find the best fit for the business in the most economical way. On average, Thrive estimates they save clients around 60% in recruitment fees compared to doing it yourself or recruitment firm hires.

We believe commission models are simply counterproductive to sustainable growth. The Thrive model enables businesses to save time, money and resources and focus on their company objectives and culture.

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    Copyright 2023. Thrive Recruitment Ltd. All rights reserved.

    Copyright 2023. Thrive Recruitment Limited. All rights reserved.