Hiring costs are rising. So what are we getting back?
Ask a Finance Director what the business spent on recruitment last year and you’ll get a confident answer. Ask what that spend actually returned, in people who performed, stayed, and got up to speed quickly, and the confidence disappears.
The CIPD Resourcing and talent planning report 2026, which we were proud to support again this year, shows the median cost of hiring a senior manager or director rising from £2,000 to £3,500 since 2024, and from £1,500 to £2,000 for everyone else*. In the private sector, the senior figure has gone from £2,000 to £5,000. Over the same period, the share of organisations measuring the return on their recruitment slipped from 24% to 19%.
In short, we’re spending more and checking less.
*Caution is required in comparing and interpreting these figures due to sample size and variation within and between sectors.
The more telling shift sits inside that 19%. Among organisations that do measure ROI, cost per hire is now the dominant measure, used by 70%, up from 49% in 2024. Meanwhile, the measures that tell you whether hiring actually worked have been sliding. Tracking of new hire performance has dropped from 61% to 44%, engagement of new hires from 47% to 34%, and the cost of a vacant role from 37% in 2024 to 23%.
Some of the shift is good news, because it suggests teams are measuring cost more thoroughly than they used to. However, the measures falling away are the ones that show the value that hiring delivers.
We think it’s a blend of things. Part of it is TA doing exactly what it’s been asked to do, which is talk the language of the business rather than TA speak. Finance thinks in cost, so cost per hire is the number that gets taken into the room. That’s a sensible instinct, and it only becomes a problem when cost ends up being the whole conversation.
The other part is pressure. Productivity is a worry in most boardrooms, TA teams are stretched, and application volumes have climbed without shortlists getting any better. The CIPD and Omni Resourcing and Talent Planning Report 2026 found that 58% of employers saw more applications from unsuitable candidates, against 33% who saw more from suitable ones. When a smaller team is wading through that, the measures that take effort to gather, such as how a hire is performing six months in, are usually the first to go.
A leaner TA team shows in the spreadsheet as a cost saving, the reality is if roles then sit open for longer, or the wrong people get through, the saving quietly turns up somewhere else as a much bigger cost that isn’t being counted against hiring at all.
To put scale in context, a median cost per hire of £3,500 sits alongside the REC’s estimate that a single failed mid-manager hire can cost more than £132,000 once lost productivity and management time are included. The cost of getting someone in is small next to the cost of getting it wrong, which is exactly why the outcome measures matter.
The questions that show whether hiring is working aren’t complicated. Are new hires performing at the level we expected? Are they still with us after a year? How long do they take to become fully productive? What did it cost us while the seat was empty? Those answers are what turn a cost line into a return, and they’re the numbers that make a Finance Director take note rather than reach for the red pen.
We see the difference this makes with clients. Restore PLC described the value of having “meaningful and timely data on what is one of the highest areas of expenditure in our business”, and that’s really the point. Once leaders can see what hiring is costing and what it’s returning, they manage it very differently.
If you’re a large business, the report suggests you’re more likely than smaller firms to be measuring any of this, with 37% of large private sector organisations measuring ROI against 9% of private SMEs. That still leaves many organisations your size making significant hiring investments without a clear view of what comes back.
We’d begin by agreeing what a successful hire looks like before the role opens, sitting down with hiring managers to decide what good performance means at six months, what retention you’d expect at a year, and how quickly someone should be up to speed. It’s much easier to measure an outcome you defined upfront than one you’re trying to reconstruct later. Given the recent change in UK legislation, this has become something that has to be on any leadership agenda.
From there, connect recruitment data with what happens after someone starts, which usually means getting TA and HR data talking to each other properly for the first time. Be realistic about where a vacancy genuinely hurts, too, because an empty seat in a revenue-generating or safety-critical role is a very different financial event from a gap in the back office.
Bring Finance in early. If the measures are built with them, the number you present is one they already trust, and the conversation moves from defending a budget to discussing what the business is getting back.
If you’d like a starting point, our recruitment cost calculator gives you a full picture of what hiring costs you in under 15 minutes, and our guide to calculating recruitment ROI goes deeper into the outcome measures. If you’d rather talk it through with us, get in touch. Rising hiring costs are much easier to defend when you can show the value they delivered, and in a year when every pound is looked at twice, that’s a case worth being able to make.
According to the CIPD Resourcing and Talent Planning Report 2026, supported by Omni, the media cost of hiring a senior manager or director has risen from £2,000 to £3,500 since 2024, and from £1,500 to £2,000 for other employees. In the private sector, the median for senior hires has risen from £2,000 to £5,000. Caution is advised when comparing these figures because of sample sizes and variation within and between sectors.
Cost per hire shows what you spent to fill a role, not whether the hire was successful. Among organisations that measure recruitment ROI, 70% now use cost per hire, up from 49% in 2024. Over the same period, tracking of new hire performance fell from 61% to 44%, new hire engagement from 47% to 34%, and the cost of a vacant role from 37% to 23%. These outcome measures are what show the value hiring delivers.
Four questions give a clear picture: are new hires performing at the expected level, are they still with the organisation after a year, how long do they take to become fully productive, and what did the vacancy cost while the role was empty? Answering these turns recruitment from a cost line into a measurable return.
Begin by agreeing with hiring managers what a successful hire looks like before the role opens, including expected performance at six months, retention at one year and time to productivity. Then connect recruitment data with HR data on what happens after someone starts, and be realistic about which vacancies have the greatest financial impact, such as revenue-generating or safety-critical roles. Involving Finance early means the measures are ones they already trust.
There is no single benchmark, because recruitment ROI varies by sector, role type and how each organisation calculates the value of its hires. Any positive ROI shows that recruitment is delivering more value than it costs. The most useful approach is to set your own baseline, then track ROI over time and compare it across roles, hiring channels and recruitment partners to see where your investment works hardest.
