Understanding your average cost per hire is critical to making smart recruitment decisions—especially in today’s economy. While quality of hire remains essential, the wrong hiring decisions can cost your company even more in the long run. Calculating your true cost per hire involves more than just salaries—it includes marketing expenses, onboarding, and time investments. Whether you manage hiring internally or outsource, it's important to evaluate all the factors that contribute to your average cost per hire.
Factors That Influence Average Cost Per Hire
Some companies rely on an internal HR department to manage the recruitment process, handling everything from advertising to onboarding. However, this approach carries a number of direct and indirect hiring costs. Key components to include when calculating your average cost per hire:
- Advertising & Job Board Fees – Costs for job fairs, college recruitment, sponsored job listings, and platform subscriptions.
- Technology & Hardware – Expenses for recruitment software, resume databases, phones, and computers used in the hiring process.
- Recruitment Marketing – Costs associated with employer branding, email campaigns, and promoting open roles.
- Onboarding & Training – Time and resources required to train new hires and integrate them into your team.
- Travel & Interviewing – Candidate travel reimbursements or staff time for multi-stage interviews.
- Salaries of HR & Recruiters – The time your team spends sourcing, screening, and interviewing candidates.
Outsourcing to Reduce Cost Per Hire
To lighten the burden, many companies choose to outsource some or all of their recruitment. Two popular approaches include:
1. Contingency Recruiting
These firms only charge a fee once a position is filled, typically 15–30% of the new hire’s annual salary. While low-risk upfront, the cost per hire can be substantial—especially for high-salary roles or hard-to-fill positions.
2. Recruitment Process Outsourcing (RPO)
Companies that partner with an RPO provider benefit from a scalable, strategic approach that reduces hiring costs over time. RPO firms provide expertise, advanced tools, and recruitment marketing strategies that improve efficiency and results.
In fact, a 2009 study by the Aberdeen Group found that:
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62% of companies using RPO significantly reduced their average cost per hire.
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77% would recommend RPO to other organizations based on positive results.
Why Choose RPO to Optimize Cost Per Hire?
By partnering with an RPO agency like Hire Velocity, companies can:
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Hire faster and more cost-effectively
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Access top talent through data-driven sourcing
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Strengthen employer branding to attract high-quality candidates
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Scale recruiting up or down as hiring needs change
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Ensure compliance with labor regulations
RPO isn’t just about cost savings—it’s about aligning talent acquisition with your business goals and staying competitive in a fast-moving hiring landscape.
Partner with Hire Velocity to Optimize Cost Per Hire
Calculating your average cost per hire is more than a budgeting exercise—it’s a strategic move that directly impacts your bottom line and the quality of your hires. From recruitment marketing to onboarding, every element of your hiring process affects cost and outcomes.
At Hire Velocity, our RPO solutions are designed to reduce recruiting costs, improve quality of hire, and deliver scalable support tailored to your needs. Organizations that leverage RPO services see measurable improvements in efficiency, satisfaction, and long-term hiring success.
Ready to reduce hiring costs and gain a competitive edge? Contact Hire Velocity to learn how we can help you hire smarter, faster, and more affordably.
