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What Employers Must Know When Drug Screening Applicants

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Did you know that the percentage of US employees testing positive for drugs has increased over the past 2 years? This includes an increase in usage across nearly all workforce categories and drug test specimen types, according to Quest Diagnostics. Drug screening is...

How Much Does it Cost to Recruit an Employee?

by | Jan 21, 2019 | Recruiting Best Practices, Recruiting Cost

Recruiter using a laptop and calculator to determine the cost of hiring a candidate.Have you ever taken time to quantify the costs involved with recruiting a new employee? If you’ve never actually tracked the time, dollars, and resources required for finding a single, new employee, you likely only have a very vague, incomplete idea of the actual costs.

Ignorance is bliss, right? Maybe. However, knowledge is power. Instead of continuing to cruise along looking at your recruitment process through rose-colored glasses, let’s dig into the direct and indirect costs of this vital function.

Direct Costs of Recruiting an Employee

Some costs are easy to identify. Start a spreadsheet and record your direct costs per year when it comes to recruiting. Divide the total spent by your total employees recruited, and you’ll have an idea of your direct costs to hire an employee.

Here are just a few areas to monitor.

Recruiter salaries or agency fees. How much do you pay your internal recruiting staff? If you’re working with a recruiting agency, how much does that cost per year? Jot that information down first.


Digital recruitment marketing costs. According to WebFX, costs for digital recruitment marketing can cost organizations between $1,000 – $20,000 per month depending on the size of the business, total job openings,  and the level of commitment to online recruiting. Think about all of the costs related to finding and attracting applicants online to understand your total spend. Your fees may include:

  • Digital advertising spend on social media.
  • Online job board fees.
  • Specialty services on social media platforms, such as LinkedIn Talent Solutions.
  • Related costs for maintaining a branded careers page (design, SEO, maintenance, etc.).

What are your online employee branding and marketing costs? Add that information to your spreadsheet.

Career events. If you attend local job fairs or campus recruiting initiatives, calculate your costs to participate. Include booth fees, printed materials, signage, swag, and other collateral you use for the event.

Evaluations, checks, and screenings. Don’t forget about the various screenings and background checks involved with the recruitment and hiring process. Are you paying for skills assessment tests? Do you hire a clinic to perform drug screenings? Are you performing credit or background checks through third parties? Tally up these costs, too. Don’t forget to allocate a portion of someone’s internal salary as part of the costs of managing these checks, tests, and screenings.

Employee referral bonuses and incentives. Do you offer perks to employees who refer qualified candidates? What’s the typical yearly cost and cost per new employee gained?

Indirect Costs of Recruiting an Employee

Indirect recruiting costs are where things get a bit murkier. However, you still need to track them. Otherwise, you’ll never know your actual costs related to talent acquisition.

Here are a few items to consider. 

Time costs of internal staff. There are a variety of scenarios to think through when it comes to the internal team and their time costs in supporting talent acquisition.

  • A dedicated, in-house recruiter: apply 100% of salary to talent acquisition costs.
  • Admins and assistants: allocate cost based on their salaries and the percentage of time they support recruiting efforts.
  • HR staffer who manages a recruiting agency: if you outsource recruitment, how much time do you