How Much Time (And Money) Does Recruiting Cost?

Image of one woman being interview by two people, something that can cost the company time and money in the recruiting process.

Updated May 2024

Employers across the country are all after top talent. In fact, a 2023 Gartner report found that 45% of HR leaders reported staffing and recruiting were among the top goals for their organization for 2023.

Not only that, but a 2024 Jobvite report found that the majority of businesses of all sizes plan on hiring at greater rates in the next 12 months.

  • 17.3% of small businesses, 22.9% of medium-sized businesses, and 24.2% of enterprises anticipate making significantly more hires in the next 12 months.
  • 43.2% of small businesses, 51.6% of medium-sized businesses, and 35.5% of enterprises anticipate making somewhat more hires in the next 12 months.

But recruiting and hiring top talent isn’t as easy—or cost-effective—as you may think. It’s important to fully understand how long and expensive it can be to recruit top talent in today’s market so you can set realistic expectations and best inform your strategy. Let’s dive in and get started.

The Time Investment of Recruiting Top Talent

One of the most important metrics in the HR world involves the “time to fill” a position, which is the time it takes to hire a candidate from when the position opens to when an offer letter is signed. While some use “time to fill” and “time to hire” interchangeably, they are slightly different metrics. “Time to hire” is the time from when a candidate submits their application to when they receive an offer letter. “Time to hire” is a subset of “time to fill.”

According to research released in 2023 by The Josh Bersin Company and AMS, the average time to fill a role reached an all-time high of 44 days in 2022. However, that number varies greatly depending on the role and industry. Energy and Defense has the longest time-to-fill rate at 67+ days.

But if your hiring process is too long or complex, you risk losing top talent. A 2022 global survey of more than 3,700 job seekers found that 78% of them “are dropping out or considering dropping out of the recruitment procedure due to lengthy and complex processes.”

There is a real and necessary time investment to recruiting top talent and avoiding a bad hire. But, there’s always room to improve. Let’s go over the steps of the recruitment so you can revise your strategy to streamline the hiring process.

Although every company is different, listed below are the general steps involved with recruitment.

Step 1: Planning and Strategy

Often, the first step of the recruitment process involves planning. At this part of the process, the hiring manager, HR, or a staffing firm will meet to discuss the open position. Things to be discussed here include the ideal candidate, compensation range, and desired skills. This part of the process can be lengthy if not everyone is on the same page—particularly if you’re not up to speed on market conditions and pay bands.

However, skipping this step or rushing through it can lead to further delays down the road, so it’s best to focus on planning your recruitment for an open position.

This step includes:

Step 2: Active Recruiting and Screening

From the time the job requisition is open, it’s time to search for candidates actively. This step is perhaps the most unique and varies in time for completion. In this part of the process, candidates are screened and interviewed. Depending on the job, there may need to be extensive and multiple rounds of interviews to vet a candidate properly. For example, filling an executive or managerial position could take up to 120 days.

This step includes:

Step 3: Hiring a Candidate

A job offer can be extended once a company has selected the ideal candidate. If the candidate accepts, then the position is considered filled. While that finishes out the time to fill, that’s not the total time cost regarding recruitment. You should also consider the time for onboarding.

Onboarding a new hire can be a lengthy process, generally lasting up up to three months. It could be shorter or longer, depending on the nature of the business’s operations and the scope of the role.

As you can see, the time investment that goes into the recruitment process is not minimal. That said, it’s important to take the time to find the right candidates to fill open roles. After all, you want to avoid a bad hire! The challenge is finding the balance between being thorough and being efficient.

RELATED: How to Make a Job Offer Candidates Will Accept

The Monetary Investment of Recruiting Top Talent

It’s often a significant investment to recruit and hire top talent. Many facets go into determining the overall cost of recruiting top talent, but some include the costs of a vacancy itself, the recruitment investment (e.g., marketing, recruiting staffing, and potential travel costs), and compensation demands, to name a few.

Costs of Open Positions

While it may seem like leaving a position open only affects the company’s bottom line in terms of dollars not being spent paying an employee in that role, that’s simply untrue. A company loses a significant amount of money every day a role remains vacant in terms of lost productivity. Also, as employees are asked to take on a vacant position’s duties, employers run the risk of additional employee turnover.

Costs of Recruiting

The average recruitment cost per hire can be great. According to the Society for Human Resource Management benchmarking data, it can cost $4,683 per hire and $28,329 per executive hire, on average. Factors that play into the overall costs of recruitment include:

  • Advertising the position (as job boards generally charge per posting)
  • Travel costs if you’re flying in candidates for interviews
  • Lost productivity from not having the position filled
  • Productivity taken away from current employees trying to fill the role

Cost of Compensation

Inflation has touched every part of the country’s economy, including candidates’ salary demands. Following years of an employee’s labor market, wage inflation can be a factor in adding to the cost of recruiting. However, this often ebbs and flows over time.

What goes into recruiting costs?

Get Help Devising a Strategy to Recruit Top Talent

At Insight Global, we know how challenging the current job market is. We also know that having the right recruitment strategy in place can help you overcome the cost—time and fiscal—challenges that recruitment can cause. But we can help. We’re experts at hiring, placing over 45,000 people in roles in 2023 alone.

We make hiring easy.

Looking to hire talent fast?

Let us know your hiring needs below, and we can provide quality candidates to interview in as little as one week. Questions? Call us toll-free: 855-485-8853