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  • Writer's pictureFahad Khalaf

4 Reasons hiring Recruitment Agency is Cost Effective

Knowing more about the particular requirements and conditions of your company makes it simple to provide a detailed cost comparison between internal recruiters and a recruitment agency. However, to demonstrate how these expenses might be contrasted here is a real-world case study: Consider a scenario in which your company has the choice of using internal recruiters or a recruitment agency to find a Customer Representative. When comparing the prices of various choices, keep the following things in mind:

  1. Wages and perks: Internal recruiters: Your HR department employs two internal recruiters, each of whom earns a salary of USD 120,000 annually (or USD 10,000 per month), plus benefits. These recruiters cost a total of USD 240,000 annually. Recruitment firm: The hiring firm will be paid 15% of the chosen candidate's first-year pay, or USD 120,000. (equivalent to USD 10,000 per month). The agency's services are priced at USD 18,000 in total.

  2. Job board and social media advertising is done by internal recruiters, who also use job boards to promote open positions. USD 5,000 is the total cost of advertising. Recruitment agency: There are no additional fees for advertising; it is included in the recruitment agency's price.

  3. Time: Internal Recruiters: Your internal recruiters devote a total of 40 hours—or 80 hours—to the hiring process. Recruitment agency: The time required for the process is expected to be 20 hours, according to the recruitment agency.

  4. Training and development: Internal recruiters: For a total cost of USD 5,000, your internal recruiters attend a training seminar on recruitment best practices. Recruitment agency: There are no additional expenses associated with the recruitment agency's normal services, which include training and development.

These figures show that the total cost of using internal recruiters for this recruitment process would be USD 250,000 (USD 240,000 salary and benefits + USD 5,000 advertising + USD 5,000 training), whereas the total cost of using a recruitment agency would be USD 18,000 (15% fee of the successful candidate's first-year salary).

Obviously, this is only a hypothetical example, and the actual expenses would vary depending on your company's particular requirements and circumstances. To make an informed choice, it's crucial to thoroughly weigh all the variables that could affect the cost of hiring internal recruiters versus using a recruitment agency. You should also develop a thorough budget and cost analysis.


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