The Cost to Recruit

Today, the average employee’s tenure is about four years long, according to a report by the Bureau of Labor Statistics in January 2016. It’s common now for employees to change jobs frequently and quickly for career advancement, higher pay, work-life balance or a less stressful role.

Employers also change staff more frequently and it’s unlikely to find employees who stay at one company for 20 years anymore. With candidates not as committed as they once were, it’s challenging to find and keep great talent. That’s why organizations need recruiters to dedicate their time to finding the best talent.

The United States economy is projected to grow three percent in 2018 according to the International Monetary Fund. Employers are constantly looking for talented, strong candidates to fill multiple roles. Larger organizations have dedicated entire teams to finding the best talent, but that comes with a price.

The hours spent creating job postings, reading resumes and conducting interviews for a position are costly. Providing salaries and benefits to recruiting staff also should be factored in. That time spent adds up and time is money. Whether an employer uses an in-house recruiting team or an outside agency to fill positions, there are hard and soft costs associated with both.

Let’s use, an online retailer of pet food and products owned by PetSmart, as an example of how these hard and soft costs can have a significant financial impact on organization’s staffing budgets.

There are currently 45 job openings in the Boston area posted on’s website. More than 25 of them are tech related and 12 are for Senior roles. An average salary for a Senior Software Engineer is about $117,000 in the Boston area, according to

Using the formula, Cost-Per-Hire + Cost-Of-Vacancy = Total Cost of Recruitment, it’s estimated that adding the cost to hire, $4,754, plus the cost of vacancy, $13,163, this role would cost Chewy roughly $17,917 to recruit if it took 30 days to fill this role. Some organizations have positions open for more than a year. If that was the case Chewy would lose more than $215k once they finally filled the role. (COV Calculator)

This Cost of Vacancy is the financial impact (a combination of hard and soft costs) of not having a position filled. This can include days position goes unfilled, loss of productivity while others fill in for the work, retraining costs and the money invested in the role. The cost to hire includes the total costs of internally hiring plus outside help divided by the number of hires. This can include salary, benefits, office space, recruiter salaries, job advertising and job board licenses.

Depending on which route you take to recruit, these are some of the costs associated with recruiting. To get the best of both worlds, recruiting teams sometimes use agencies for the tough to fill roles that are costing them time and money by not being filled.

In-house costs can include recruiter salaries, referral bonuses, interview costs (# of hours X hourly salary of interviewer or hiring manager) and fixed costs such as an office, laptop or iPad and company phone.

Agency costs can range in fees, but the typical price range is 15-25 percent of the direct-hire’s salary. They typically cover the advertising costs to include licenses needed to recruit top talent (e.g., job boards such as Dice, LinkedIn and Monster). Other recruiting costs can include career fair / recruiting event costs, LinkedIn Recruiter Licenses – $4-6k annually, LinkedIn Job Postings – $300-500 per post, Dice Search Licenses – $6-7k annually, Dice Job Postings - $300-500 per post, Monster Search Licenses - $3-5k annually, Monster Job Posting - $300-500 per post, CareerBuilder Licenses - $3-5k annually, CareerBuilder Job Postings and GitHub - $400-500 per posting.

It’s important to understand these costs and how they can affect your business. Hiring great talent requires organizations to change how they think and see that recruiting is a business on its own. It’s not as simple as just posting a job and hoping the right person will apply and be exactly what you were looking for. Micro Tech Staffing Group knows this industry and can help recruit great candidates while saving your company time and money. Contact us today.

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