Most companies have no idea what they're actually spending to hire someone.
They see the agency invoice — 20% of first-year salary, $30,000 on a $150K role — and wince. But that's just the part that shows up on a budget line. The real cost of a hire is far higher, and it's largely invisible.
What actually goes into a hire
When you add it all up, a single hire typically involves:
- Recruiter time: 20–40 hours sourcing, screening, scheduling, and managing the process
- Hiring manager time: 5–15 hours across intake, interviews, debrief, and offers
- Job board spend: $300–$1,500 per posting, per month
- Agency placement fee: 15–30% of first-year salary (if used)
- Onboarding costs: background checks, equipment, training time
- Opportunity cost: lost productivity from an unfilled seat
For a $120,000 role filled via agency, you're often looking at $30,000–$45,000 all-in. For a company making 10 hires a year, that's $300,000–$450,000 spent on the process of hiring alone.
Why agencies are the biggest line item
Agencies made sense in an era when candidate data was hard to access. The value proposition was simple: they had the Rolodex and you didn't.
That's no longer true.
Today, LinkedIn alone indexes over 900 million professionals. Tools like Apollo, Clay, and Hunter make it possible to find anyone's contact information. The infrastructure to run outbound recruiting campaigns — once available only to large retained search firms — is now accessible to any company with the right setup.
The agency fee is paying for access to something you could build yourself. Or, better yet, outsource to a platform built specifically for this.
The Cherrypicker approach
Cherrypicker runs outbound recruiting campaigns on your behalf — sourcing candidates, finding their contact data, writing personalized outreach, and delivering interested, qualified candidates directly to your inbox.
You pay a flat monthly subscription. No placement fees. No percentage of salary. No surprises.
For most clients, that works out to less than $2,500 per hire — regardless of how many roles they fill or what those roles pay.
The math is straightforward. If you're making 6 hires a year at an average agency cost of $25,000 per hire, you're spending $150,000. Cherrypicker's annual cost is a small fraction of that.
Calculating your number
Want to know your actual cost-per-hire? Use this formula:
Cost-per-hire = (External costs + Internal costs) ÷ Number of hires
External costs include: agency fees, job board spend, LinkedIn Recruiter seats, background check vendors, any other tools.
Internal costs include: recruiter salary prorated to time spent, hiring manager hourly rate × interview hours.
Most companies find their real number is 2–3x what they thought.
The bottom line
The goal isn't just to hire faster. It's to hire smarter — with a process that's repeatable, predictable, and doesn't bleed your budget every time you add a headcount.
That starts with knowing what you're actually spending.