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 £1,5000 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% 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 what 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 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 mid-sized 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 most 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 what they bought, and in a year when every pound is looked at twice, that’s a case worth being able to make.
It depends on the work. An embedded recruiter is one person and can be the right call for a single ongoing need. Project RPO gives you a team with cover, quality control, and accountability, which is the safer choice when a cluster of roles has to land on time.
Project RPO or recruiter on demand. Project RPO suits a defined surge that needs end-to-end ownership and speed, while recruiter on demand suits a simpler need for extra hands. A managed team can stand up in days and scale back down cleanly afterwards.
There’s no fixed minimum, but project RPO typically earns its place once you have a defined cluster of roles, often from around eight to ten upward, over a set window. Below a handful of roles, a recruiter on demand or an embedded recruiter is usually lighter.
No. Project RPO is defined by having a defined project, not by volume. It works from as few as eight to ten roles up to many hundreds, so a focused build can be just as good a fit as a large-scale surge.
Embedded recruitment places individual recruiters inside your team on an open-ended basis. Project RPO gives you a managed team that owns a defined block of hiring end to end, for a set period. Both operate under your brand, so the differences that matter are team structure, scope, and what stays behind.
Less than the marketing suggests. Both can run under your brand, both flex, and both can be fixed cost. The real differences are that Project RPO gives you a managed team rather than an individual, is scoped to a defined project rather than open-ended, and is built to leave capability behind when it ends.
