What it costs to recruit an employee in the UK

Key takeaways

The cost of recruiting an employee in the UK is advertising or agency fees, plus the hours spent writing the role, screening, interviewing and onboarding. Direct hiring for an admin role might cost £1,000–£2,000 in time and adverts; an agency charging 20% of a £28,000 salary adds £5,600. It recurs every time someone leaves.

• £5,600 is the fee if an agency charges 20% on a £28,000 salary.
• Manager time of 20 to 30 hours per hire is a common hidden cost.
• Right-to-work checks are a legal duty for every new hire.
• Managed outsourcing absorbs recruitment and replacement.

What does recruiting an employee cost?

Recruitment cost is the total spent to fill a role: external fees and adverts, plus the internal time of everyone involved. Internal time is usually the larger part for direct hiring, and agency fees the larger part when an agency is used. Both are one-off per hire, but they recur with every leaver.

• In-house vs outsourcing: which model is more cost-effective?

Which recruitment costs should you count?

Count each of these for a realistic figure.

• Job adverts and job board fees.
• Agency fees, often a percentage of first-year salary.
• Writing the job description and advert.
• Screening applications and first calls.
• Interviews, usually two stages with two people.
• Right-to-work and reference checks.
• Contract, payroll and system set-up.

• Total cost of ownership of an in-house team

What does a worked example look like?

A small business hiring a £28,000 administrator directly spends about £400 on adverts and 25 hours of manager time at £40 an hour, £1,000. The recruitment cost is about £1,400. Through an agency charging 20%, the fee is £5,600, plus about 10 hours of interview time, £400, for £6,000 in total.

If the role turns over every two years, that cost appears roughly every two years, adding about £700–£3,000 a year to the role's true cost.

What legal checks does recruitment involve?

Every UK employer must check that a new employee has the right to work in the UK before they start. Employers who fail to carry out checks face civil penalties per illegal worker, set out on GOV.UK. You must also register as an employer with HMRC before the first payday and meet pension auto-enrolment duties.

• The cost of training a new employee

How long does recruitment take?

For an admin or support role, several weeks from advert to start is common, longer if the candidate has a notice period. During that time, the work is either covered by others, often in overtime, or it waits. That vacancy cost is separate from the recruitment cost and often larger.

• The cost of an unfilled vacancy
• Struggling to recruit staff? When outsourcing fits

How does outsourcing handle recruitment?

A managed provider recruits, vets, trains and replaces its own team, and the cost is built into the rate. You do not pay a fee when someone leaves, and cover continues during replacement. You still invest time in the initial handover, usually documented once.

• BPO Solutions for UK businesses

When is recruiting still worth the cost?

When the role is core, long-term and fully used, a recruitment cost of £1,000–£6,000 spread over several years is small. It weighs most heavily on roles with high turnover, part-time volumes or seasonal peaks, where it recurs often.

• When is in-house cheaper than outsourcing?

How can you cut recruitment cost?

Reduce the number of hires and the cost of each. A clear job description and a short work-sample task reduce failed hires; asking current staff for referrals cuts advertising; and reviewing whether the role needs to be a hire at all avoids the cost entirely for work that suits outsourcing.

• Write the first 90 days of the role before advertising.
• Use a short paid work sample to test candidates.
• Ask staff and customers for referrals.
• Negotiate agency fees and rebate periods in writing.

• The cost of a bad hire, and how to limit it

What does this look like in practice?

A pattern we see in UK hospitality groups: reservations staff are recruited through agencies each season, and each hire needs retraining on the booking system. Moving reservations to a managed team removes the recurring fees and keeps the knowledge between seasons.

• Reservations and guest support outsourcing for hospitality
• See client work

Recruitment cost checklist

Use this to cost your next hire.

• Add advert or agency fees.
• Log manager hours per hire and value them.
• Include right-to-work checks and set-up admin.
• Estimate how often the role turns over.
• Spread the cost per year of expected tenure.

Next step

Tell us the role you are about to hire for. We will cost the hire, including recruitment, against a managed alternative in a 30-minute call.