In short
The recruitment fee is the visible cost of a hire, but it is rarely the largest one. The real cost is the fee plus the cash timing around it, the weeks before the hire is productive, the internal hours spent interviewing, and the risk that the person does not stay. Planning only for the fee is what makes early hires feel more expensive than expected.
Key facts
- Usually the biggest single invoice
- The recruitment fee at start date
- Worst timing
- Fee, first salary and onboarding land in the same month
- Most under-counted
- Founder and engineer hours spent interviewing
- Most damaging
- A hire who leaves after the rebate window closes
Start with the cost you can see
A traditional contingent recruitment fee is a percentage of first-year salary, invoiced at or shortly after the start date. It is a single, large, immediate payment made before the hire has produced anything.
That is not a criticism of the model — it reflects real search work already completed. But for a company measuring runway in months rather than years, the timing matters as much as the amount.
The cost layers of one hire
Only the first line usually appears in a hiring budget. The rest are real and land anyway.
| Cost layer | When it lands | Usually budgeted? |
|---|---|---|
| Recruitment fee | At or shortly after start date | Yes |
| Salary, employer costs, benefits | Monthly from start date | Yes |
| Equipment, tooling, licences | First weeks | Sometimes |
| Ramp-up before full productivity | First weeks to months | Rarely |
| Internal interview and screening hours | Before the hire | Almost never |
| Cost of re-running a failed hire | Only if it happens | No |
Treat this as a checklist for your own numbers, not as a benchmark.
Why the timing hurts more than the number
In the month a hire starts you typically pay the recruitment fee, the first salary, onboarding costs and equipment. For a funded startup that concentration is felt against a burn plan, not a budget line.
The return from the hire arrives later, spread over quarters. So the cost is front-loaded and the value is back-loaded — the opposite shape to the one most early-stage businesses want.
The cost of a hire who does not stay
Rebate periods on traditional fees are usually short and taper quickly. Once the window closes, the fee is spent whether the person is still there or not, and the search starts again from the beginning.
This is the cost line that most often turns a good hiring year into a bad one, and it is the one a fee paid at the point of hire does nothing to protect you against.
A five-minute costing you can actually do
Before approving a role, write down these five numbers for it.
1. The fee
Whatever your current recruitment arrangement charges, expressed in pounds rather than a percentage.
2. The month-one cash total
Fee plus salary plus employer costs plus equipment, all in the first month.
3. Weeks to useful output
Be honest. For senior or deep-technical roles it is usually longer than you would like.
4. Internal hours
Number of interviews multiplied by the number of people in each, including preparation and debriefs.
5. Your exposure if they leave at month six
What have you spent by then, and how much of it is recoverable?
Common questions
- Is a monthly model always cheaper than a traditional fee?
- No. It changes when you pay and what happens if the hire leaves. Beyond a certain tenure the cumulative monthly total passes what a single fee would have been — the calculator shows exactly which month that happens in for your own numbers.
- Should we include internal hours in the cost of a hire?
- If founders and senior engineers are running screening and interviews, those hours are the most expensive time in the business. You do not need a precise figure, but you should know roughly how many hours a role is consuming before you approve another one.
- What is the cheapest way to hire at seed stage?
- Hiring nobody is cheapest, and occasionally correct. Beyond that, the cheapest real option is the one where you avoid a bad hire, so spend the effort on the brief and the assessment rather than on shaving a fee.
Model the cost of a hire
Put a salary in and see the illustrative monthly figure, the cumulative cost and the crossover point against a traditional fee.
Open the rate calculatorAny percentages or figures shown in this article are illustrative examples used to explain the model. They are not quoted rates, market benchmarks or salary data.