Making the decision to bring recruitment in-house or use a recruitment agency can be tough, as there are many factors to consider. In this article, we will provide some insight into both approaches to assist you in deciding which is best for your business. We will compare the advantages and disadvantages of in-house recruiting vs. using an agency. Looking at important factors such as the cost of technology and systems and the hidden costs like time spent on calls and interviewing candidates. Along the way, we will give you some stats that might help you make your decision.

The true cost of recruitment

Your people are one of the biggest and most important investments your businesses will make. In-house recruiting and using a recruitment agency both have their pros and cons. In order to make the best decision for your business, it’s important to understand the true cost of recruitment. Estimates for this cost can vary widely but CIPD (Chartered Institute of Personnel and Development) estimates the average cost of filling a vacancy, including labour costs, is £6,125. For a management role, these figures rise to £19,000. However, that figure can be significantly higher when headhunting for more senior roles. Recruitment agencies can charge 20-30% of the salary.

While the cost of using a recruitment agency might seem high at first glance, it’s important to consider the hidden costs of recruiting in-house. The average time taken to make an unplanned hire is 11 weeks according to the CIPD. In comparison, an agency-led process takes on average just 3.5 weeks. This difference in time can have a significant impact on productivity levels, as vacancy rates will be higher for roles that are unplanned. Moreover, talent acquisition teams often struggle to fill their own vacancies with estimates that 70% of in-house solutions fail. In contrast, recruitment agencies have access to a larger talent pool and a higher success rate, with Talento achieving a 93% fill rate.

How to calculate cost per hire

Understanding how much you’re spending to hire people will be a key factor in deciding whether to manage the recruitment process internally or work with a recruitment agency. Having a solid understanding of your cost per hire (CPH) can help you improve your hiring process.

Cost per hire is the amount it costs you to make a hire. As it’s difficult and time consuming to work this out for every single job, normally it is an average cost over a period of time (a month or year). Their cost-per-hire formula is fairly simple:

CPH = (Internal recruiting costs + External recruiting costs) / Total number of hires

Some costs are obvious and easy to measure. However, while recruiting internally there can be hidden costs that are not always easy to calculate. One of the biggest hidden costs is the time spent on phone calls and interviewing candidates. Time that could be better spent on other tasks such as revenue-generating activities.

According to, below are some of the average costs of recruitment in 2022.

  • £207 Job Board Fees
  • £200 Advertising costs
  • £6,000 Recruitment Agency Fees
  • £3,000 Internal Recruitment Expense
  • £10,000 Invisible Business Costs
  • £18,500 Hiring the Wrong Person
  • £15,095 Average Cost Per Hire​

In-house recruiting

Bringing recruitment in-house can be a daunting task. You need to have the right systems in place, as well as the time and resources to find and interview candidates. It can be costly, and there is the risk of making a bad hire. However, there are some advantages to managing the recruitment process in-house. You will have more control over the process, but this comes at a cost. Although you can save money by not paying an agency fee – it is important to factor in some of the hidden costs to allow you to compare the true cost per hire.

Advantages (in-house recruiting)

There are several advantages of handling your recruitment process in-house:

  • You have more control over the process, from writing job adverts to interviewing candidates.
  • You can potentially save money by not paying an agency fee.
  • You can get to know the candidates better as you will spend more time speaking to them. ​

Disadvantages (in-house recruiting)

However, there are also some disadvantages to in-house recruiting:

  • The cost per hire can be higher as you might have to spend more on advertising and technology
  • It can be time-consuming to write job adverts, post them, and search through CVs
  • You may not have the resources to interview as many candidates as you would like
  • There is a risk of making a bad hire, which can be costly and time-consuming

In order to make the most of in-house recruiting, you need to be organised and efficient. You need to have a clear idea of what you are looking for in a candidate, and you need to be prepared to spend time on the phone and interviewing candidates. If you can manage these things effectively, then in-house recruiting can be a successful way to find talent for your organisation.

Recruitment Agencies

If you decide to use a recruitment agency, it is important to choose one that is experienced in your industry. They should have a good understanding of your organisation and what you are looking for in a candidate. It is also important to discuss the recruitment process with them so that you are both clear on what is required.

Advantages (recruitment agency)

Recruitment agencies have several advantages over in-house recruitment:

  • They have access to a larger talent pool, as they work with a large number of candidates
  • They are experts at the recruitment process and know how to find the best candidates for your position
  • They can save you time and money by quickly filling your position
  • They are experienced in screening candidates, so you don’t have to spend time interviewing unsuitable candidates.

Disadvantages (recruitment agency)

There are also some disadvantages to using a recruitment agency:

  • You will have to pay an agency fee, which can be costly.
  • They might not have the quite same understanding of your organisation as you do.
  • You might not have as much control over the process.

If you are looking for a quick and efficient way to fill a position, then using a recruitment agency can be a good option. They have the experience and expertise to find the best candidates for your organisation. However, it is important to consider the cost of using an agency, as well as the level of control that you want over the process.


To sum up, in-house recruiting vs. using an agency is a decision that you need to make based on your specific needs. Consider the advantages and disadvantages of each option before making a decision. If you are organised and efficient, in-house recruiting can be a successful way to find talent for your organisation.  

If you’re looking for a successful and efficient way to find talent for your organisation, Talento can help. We have access to a large talent pool and are experts in the recruitment process. We can save you time and money by quickly filling your position. Contact us today for a no-obligation discovery call to discuss your specific recruitment needs.