Is your cost of hire as low as you think? RecruitiFi can cut almost $10K from each agency hire.
The Challenge In Recruiting
Truly calculating your cost of hire is a challenge. Whether you’re a large company with a TA team or a small company with an HR generalist, there are a number of hidden costs that make your hiring more expensive than you think. If you’re marking the cost of any given hire as $200 because that’s what you spent on the job board posting, you’re sorely undercalculating.We’ve spoken with a number of clients who have given us similar versions of the following methodology for calculation.
An in-house Talent Acquisition professional is typically making 50 hires a year. Half of those come in through the career page or via employee referral, involving relatively little sourcing time--just a few hours of vetting, coordinating interviews, etc. The other 25 hires involve a deeper level of sourcing and actually take 75% of that TA professional’s time. Let’s assume that your TA professional makes $75,000/year.
| Cost | Category | Explanation |
|---|---|---|
| $56,250 | TA Salary | You're paying a TA professional $75K, and they spend 75% of their time on 25 challenging hires. This is the salary you're paying your TA professional to find those candidates. |
| $56,250 | Other TA Expenses | Double the TA professional’s salary for other employment expenses (benefits, equipment, office space, payroll taxes, 401K matches, etc.). |
| $25,000 | Recruiting Tools | Paid job postings, LinkedIn Recruiter license, and other sourcing tools. |
| $62,500 | Agency Fees | Typically 10% of roles end up getting filled by agencies even after your TA team works on them. That's an average of 2.5 hires per year for each TA professional. At a 25% fee on $100K salary = $62,500. |
| $11,875 | Salary of Other Staff | Recruiting coordinators and hiring managers spending hours setting up screening calls, reviewing, interviewing, and rejecting candidates that ultimately don’t get hired. |
| $211,875 | Total | Total cost for all 25 challenging hires made by each TA professional. |
| $8,475 | Cost Per Hire | Total cost for each hire. |
| $30,975 | Cost of Agency Hires | Cost for each agency hire, including the full agency fee and all other resources spent before sending the role to your agencies. |
Shocked by that number? You should be! And this doesn’t even count soft costs like cost of vacancy, departmental disruption, etc.
The RecruitiFi Solution
On average, our clients cut a week out of their time to hire, which dramatically reduces the hours you spend sourcing for a role. Not to mention, our community of expert agencies makes placements at 14%, so you can significantly cut your overall agency spend.Our clients see the largest savings when they choose to immediately outsource a portion of the roles that they’ve typically ended up sending to agencies in the past. This gives more time back to your TA team, so they can make more hires internally with the same resources, driving down the overall cost of hire. If every TA professional is able to make 2 more hires per year with that time, and your agency costs are lowered throughed RecruitiFi, your overall cost of hire goes down to $7,337—a savings of $1,140 per hire!
The savings are even more dramatic if we’re just looking at your agency hires that currently cost almost $31,000 per year. Let’s calculate the costs using RecruitiFi:
| Cost | Category | Explanation |
|---|---|---|
| $750 | TA Salary | TA professionals spend 1/3 of the time, as they are no longer sourcing, just reviewing candidates like they would with referrals or career page applicants. |
| $750 | Other TA Expenses | The less time spent, the less expenses. |
| $0 | Recruiting Tools | No need for paid job postings, and there are no posting fees on RecruitiFi. |
| $19,500 | Agency Fees | Our community typically makes 50% of your hires at 14%. This brings your average percentage down from 25% to 19.5%. |
| $300 | Salary of Other Staff | Less unqualified candidates and faster hires means less time spent by your recruiting coordinators and hiring managers. |
| $21,300 | Cost of Agency Hires | Cost for each agency hire on RecruitiFi. |
| $30,975 | Old Cost of Agency Hires | Your current cost for each agency hire. |
| $9,675 | Savings | This is your savings for each agency hire by using RecruitiFi. |
This doesn’t even consider the cost of vacancy—a soft cost, which is estimated at 2 to 3 times the person’s salary. For a $100,000 employee, that’s almost $4,000 to $6,000 per week. With RecruitiFi typically cutting one week out of your time to hire, you can add that to the savings!
Reduce Your Agency Spend?
Related Case Studies
Accenture tapped into new pools of talent, allowing them to staff hard-to-fill consulting positions, increasing their bottom line.
Manfrotto saves tens of thousands of dollars by making 33% of their agency hires through the RecruitiFi Expert Community.
How did Red Ventures, referred to by many as the Google of the East Coast, expand their reach into more diverse talent pools?