For employers

Agency, in-house or a desk: what does hiring ten, twenty or thirty people a year cost?

On a $120,000 average package at a 15 per cent fee, ten hires through an agency costs about $180,000 a year, twenty costs $360,000 and thirty costs $540,000. One in-house recruiter costs about $145,000 a year and can run roughly twenty hires before you need a second. A desk run by your team costs about $129,000 a year at ten hires and $141,000 at twenty, and a desk run by us costs $102,000 to $162,000. The agency is the cheapest way to hire a few people and the dearest way to hire many; a desk run by your team is level with one in-house recruiter at twenty and the cheapest option at ten and at thirty.

The assumptions

Every figure below uses the same inputs so the three options can be compared. Average package $120,000 including super. Agency fee 15 per cent of package, a conservative point inside the 10 to 25 per cent range in published Australian fee guides. One in-house recruiter at $145,000 a year all in, built from PayScale's Sydney figures plus on-costs, a Recruiter seat, an ATS and adverts. One person on your own desk at $94,000 a year loaded, which is an $80,000 base with super and on-costs. Desk prices as published on the Partnership Desk page. Your numbers will differ; the shape of the result will not.

Ten hires a year

Agency: $180,000. In-house: $145,000, with the recruiter under-used for a good part of the year. Desk 3 run by your team: $35,400 for the desk plus $94,000 for your person, $129,400. Desk 3 run by us three days a week: $101,940. At ten hires the agency is already the dearest option, about $50,000 above a desk run by your team and nearly $80,000 above one we run. This is the floor for a desk; below ten, we would point you to the Partnership Programme instead.

Twenty hires a year

Agency: $360,000. In-house: still $145,000 if one recruiter can carry twenty hires, which in construction and trades is a full year's work for a good one. Desk 6 run by your team: $47,400 plus $94,000, $141,400. Desk 6 run by us: $161,940. Here the honest answer is that a desk run by your team and one in-house recruiter are level, within $4,000 of each other, and a desk we run is about $17,000 dearer than the in-house hire. What the desk buys for the same money is the market map, the record, the mornings and the fact that if it is not working you give a month's notice rather than managing someone out. Against the agency, either desk saves about $200,000.

Thirty hires a year

Agency: $540,000. In-house: one recruiter cannot run thirty, so either a second person at $290,000 for the pair, or one recruiter plus agency overflow on ten hires at $325,000. Desk 6 plus a second desk run by your team: $94,800 for the desks plus $94,000 for one person, or $188,000 for two, which is $188,800 to $282,800. Run by us: $323,880, with two full-time callers. At thirty the agency costs more than $200,000 above any other option, and a desk run by your team is the cheapest way to run the volume by about $100,000.

What the numbers do not say

The cheapest line is not always the right one. An agency is right when hiring is occasional, urgent or senior. An in-house recruiter is right when you have the volume and someone good to do it, and you are willing to carry the fixed cost through the quiet months. A desk is right when you hire all year, want the record and the map to be yours, and do not want to build a recruiting function from scratch. If you are not sure which you are, ring and ask. We sell all three and will tell you which fits.

Common questions

At what volume does a recruitment agency stop making sense?
On the published fee ranges, about ten hires a year. At that point agency fees on a $120,000 package reach roughly $180,000 a year at 15 per cent, more than an in-house recruiter or a managed desk.
Is a managed desk cheaper than an in-house recruiter?
At ten and thirty hires a year, yes. At twenty the two are level: about $141,000 for a desk run by your team against $145,000 for one in-house recruiter. At any volume the desk comes with the market map, the record and a month's notice rather than a payroll commitment.
What does hiring twenty people a year cost through an agency?
At 15 per cent of a $120,000 package, about $360,000 a year. At 18 per cent it is $432,000; at 20 per cent it is $480,000.

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