Challenge

How much does recruitment really cost?

Why internal teams, agencies and contractor models become expensive at scale.

Case Studies

The True Cost of a Hiring Function

Most organisations think about the cost of hiring in simple terms – recruiter salaries, agency fees or maybe the cost per hire, but the reality is more complex.

What makes up the cost of a hiring function?

In most organisations, hiring costs fall into four areas:

  • People – internal recruiters, talent leaders, coordination time
  • External spend – agency fees, contractor costs, sourcing tools
  • Technology & infrastructure – ATS, reporting, integrations
  • Inefficiency – delays, re-hiring, poor process, missed hires

These costs are shaped by the combination of hiring models. 

Hiring Model Comparison

One goal, four very different hiring models

Internal teams, contractors and agencies each carry a different cost structure, set of risks and potential inefficiencies. At small scale these are manageable but at scale they can compound

Permanent Recruiters

Benefits

  • Aligned with company culture
  • Strong relationships with hiring managers
  • Long-term capability
  • Greater control over brand and candidate experience

Considerations

  • Fixed cost regardless of hiring volume
  • Ramp-up time before productive
  • Ongoing management overhead
  • Difficult to scale down quickly

Cost per hire

Typical demand £££££
Peak demand £££££

Contract Recruiters

Benefits

  • Rapid access to experienced recruiters
  • Flexible resource during hiring peaks
  • Minimal long-term employment commitment

Considerations

  • Inconsistent quality
  • Knowledge loss when they leave
  • Compliance / IR35 considerations
  • Limited long-term optimisation

Cost per hire

Typical demand £££££
Peak demand £££££

External Recruiters

Benefits

  • Large candidate networks
  • Access to specialist and hard-to-find talent
  • No fixed recruitment overhead
  • Ideal for occasional or niche hiring

Considerations

  • Higher cost at scale
  • Less visibility of recruitment activity
  • Reactive, role-by-role hiring
  • Duplicated effort internally

Cost per hire

Occasional / niche £££££
At scale £££££

Troi RPO Solutions

Benefits

  • Predictable, scalable hiring costs
  • Dedicated recruitment capability without building a large internal team
  • Flexible support that can expand or contract with demand
  • Opportunity to improve hiring processes over time

Considerations

  • Requires commitment to a structured approach
  • Best suited to organisations with ongoing hiring needs
  • Requires stakeholder engagement

Cost per hire

Flexible with demand £££££

Case Study

Discover how BT increased hiring capacity and achieved £3.5 million savings

Troi delivered 500 hires for BT, achieving £3.1M savings, 80% external hiring growth, and stronger workforce diversity.

Read Case Study

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Discover Troi's Talent Solutions to Reduce Hiring Costs

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Some questions you may have could be listed here in our FAQS, but if you're interested in any other information, don't hesitate to get in touch with us.

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What is the true cost of a hiring function? +

The true cost of a hiring function goes beyond salaries and agency fees. It includes internal resource, external spend, technology, and the hidden cost of inefficiency such as delays, poor processes and missed hires. These factors combine to create a much broader cost base than most organisations initially expect.

How do you calculate cost per hire? +

Cost per hire is typically calculated by combining all internal and external hiring costs and dividing by the number of hires made over a given period. This should include salaries, agency fees, technology, advertising, and the time spent by hiring managers and internal teams.

Is it cheaper to hire internal recruiters or use agencies? +

At smaller scale, internal recruiters may appear more cost-effective, while agencies provide flexibility. However, as hiring volume increases, both models can become expensive in different ways — internal teams create fixed costs, while agencies drive high variable costs. The most cost-effective approach depends on scale, consistency and structure.

Why do recruitment agencies become expensive at scale? +

Agencies typically charge a percentage of salary, meaning costs increase directly with hiring volume and seniority. As hiring scales, this model becomes increasingly expensive, particularly when combined with duplicated internal effort and limited process control.

What are the hidden costs of an internal talent team? +

Internal teams often introduce hidden costs such as underutilised capacity, management overhead, ramp-up time, and technology gaps. There can also be inefficiencies in process and inconsistent hiring outcomes, all of which increase the true cost over time.