COST COMPARISON
Understanding the Financial Impact of Different Hiring Models
Every organisation approaches hiring differently, shaped by its structure, growth plans and operating environment.
This page is designed to support Finance, HR and Talent leaders in understanding how different hiring models behave financially, particularly when demand fluctuates and how an outcome-led Talent Acquisition model compares in practice.
The intention is not to prescribe a single solution, but to support informed, strategic decision-making.
THE COST DYNAMICS OF TRADITIONAL HIRING MODELS
Internal Talent Acquisition teams play a vital role in many organisations. However, from a financial perspective, their cost base is largely fixed, regardless of hiring volume.
A typical internal TA cost profile may include:
- Salaries
- Employer National Insurance and pension contributions
- Recruitment systems and ATS costs
- Recruiter licences (for example, LinkedIn Recruiter)
- Training, management and general overhead
- Periods of under-utilisation when hiring demand reduces
While this model provides stability, it can be less responsive when hiring demand rises or falls unpredictably.
THE REALITY OF AGENCY SPEND
Even where internal TA teams are well established, many organisations continue to use recruitment agencies for:
- Urgent or business-critical roles
- Specialist or hard-to-fill positions
- Peaks in demand
- Capacity gaps within internal teams
Agency fees, typically charged as a percentage of salary, can introduce cost volatility, particularly when used alongside fixed internal teams.
In practice, this can result in dual cost exposure:
- Fixed internal TA costs
- Variable agency fees layered on top
AN ILLUSTRATIVE FINANCIAL EXAMPLE
Outcome-led TA delivery in practice
The example below reflects a typical pattern seen within large, multi-site organisations with fluctuating hiring demand. Figures are indicative and provided for illustration.
Context
A complex organisation with:
- Ongoing, variable recruitment demand
- A small internal TA leadership team
- Continued agency usage for volume and urgent roles
Annual hiring volume:
Approximately 300 roles per year, across multiple locations.
Traditional cost profile (illustrative)
Internal TA delivery
- Talent Acquisition professionals @ ~£50,000
- Employer NI and pension contributions
- Recruitment tooling and recruiter licences
Approximate annual internal TA cost:
£400,000–£420,000
Agency usage
- ~25% of roles filled via agencies
- Average salary: £40,000
- Average agency fee: 20%
Estimated annual agency spend:
75 roles × £8,000 = £600,000
Total annual recruitment-related cost
Approximately £1,000,000+
This cost remains largely fixed or unpredictable, even as hiring demand fluctuates.
Outcome-led delivery model
The organisation introduced a combination of:
- Outcome-based role support for single and volume hires
- Location-based volume campaign pricing
- Plug-in TA capacity during peak hiring periods
Illustrative annual cost profile
- Outcome-based hiring support: ~£140,000
- Plug-in TA capacity (as required): ~£120,000
Total annual cost
Approximately £260,000
What changed
- Internal TA leadership remained in place
- No additional permanent headcount was required
- Reliance on recruitment agencies reduced significantly
- Hiring activity flexed without cost escalation
Indicative cost avoided:
~£700,000 per annum
More importantly:
- Recruitment spend became variable rather than fixed
- Cost forecasting improved
- Senior TA leaders were able to focus on strategic workforce priorities rather than delivery pressure