Replacing a single employee costs the average UK business over £6,125 in direct recruitment costs alone, and that figure climbs sharply the longer a role stays vacant. Research from CIPD suggests organisations lose approximately £2,450 in output for every additional week a position sits unfilled. For managerial roles, the average cost of a single hire rises to around £19,000.
Recruitment agencies play an important role in helping businesses hire quickly and access specialist talent. However, for HR teams managing multiple agencies across different locations, recruitment can quickly become difficult to control.
Without a clear view of agency performance, recruitment spend and hiring outcomes, it’s almost impossible to know which suppliers are delivering value and which are simply increasing costs. The result is duplicated effort, inconsistent reporting and budgets that are harder to justify.
That’s why, to improve recruitment ROI, employers need to make smarter recruitment decisions based on data.
What is Recruitment ROI?
Recruitment ROI measures the value your organisation receives from every pound invested in hiring. While many businesses focus on reducing recruitment costs, the real objective is to maximise the return from that investment.
Recruitment ROI = ((Value of hires − Total recruitment costs) ÷ Total recruitment costs) × 100
A low cost per hire doesn’t always mean successful recruitment. If candidates leave within months, underperform or require lengthy onboarding, the overall return quickly declines. The quality and longevity of each hire are just as important as the initial recruitment cost.
Recruitment firms typically charge an average fee of 15% to 25% of a candidate’s first-year salary for permanent hires, while temporary or contract roles generally incur an hourly or daily markup, usually between 15% to 30%
When working with multiple recruitment agencies, understanding ROI becomes even more important. Comparing agency performance allows HR teams to invest more with suppliers who consistently deliver high-quality candidates while reducing spend with those who don’t.
3 KPIs to Look Out for to Improve Recruitment ROI
To improve recruitment ROI, hiring teams need visibility over the metrics that have the greatest impact on recruitment costs, workforce performance and agency delivery. The below KPIs provide a useful starting point.
Average Time to Fill
Long-standing vacancies can affect productivity, place additional pressure on existing teams and increase the overall cost of recruitment.
Tracking average time to fill by agency helps employers identify which suppliers respond quickly and consistently. It can also highlight particular roles, projects or sites where vacancies regularly take longer to fill.
Quality of Hire
Employers need to understand whether agencies are supplying reliable workers who remain available and support the needs of the project.
Although quality of hire is not measured through one figure alone, it can be assessed by reviewing several performance indicators together within the Strategic Resourcing Performance Hub. These may include no-shows, how quickly replacements are provided, hours worked, approved and declined timesheets, workers supplied and certificate expiry dates.
Cost per Agency
Tracking recruitment spend by agency provides a clear view of where your budget is being invested.
However, cost should never be considered in isolation. Comparing agency fees against average time to fill and quality-of-hire indicators helps employers understand which recruitment partners provide the strongest overall value.
The lowest-cost agency may not deliver the best return if vacancies remain open for longer or supplied workers regularly need to be replaced.
Read our guide recruitment analytics: what employers should track to discover the additional recruitment, workforce and agency performance analytics hiring teams should focus on.
Why Visibility is Often the Biggest Challenge
Many HR teams already collect recruitment data, but it’s often spread across spreadsheets, emails, finance systems and individual agency reports.
When managing several recruiters across different business locations, comparing performance becomes incredibly difficult. One agency may appear successful simply because they’re filling more vacancies, while another may be delivering better-quality hires with higher retention rates.
Without a central dashboard displaying recruitment activity, important decisions are often based on relationships or assumptions rather than evidence.
Practical Ways to Improve Recruitment ROI
Improving recruitment ROI doesn’t necessarily require changing your preferred recruitment agencies – it simply starts with better management.
Begin by setting clear expectations with every recruitment partner, including agreed service levels, response times and quality standards. Regular performance reviews ensure agencies remain accountable and focused on delivering results.
Next, review recruitment spends across all suppliers rather than looking at individual placements. Identifying trends in costs, time to hire and candidate quality allows you to allocate more vacancies to your highest-performing agencies.
Finally, centralise your recruitment data. Having one location to monitor agency performance, recruitment spend and successful placements makes it much easier to identify what’s working and where improvements can be made.
How Strategic Resourcing Can Help
For organisations working with multiple recruitment agencies, the biggest challenge isn’t finding recruitment data – it’s bringing everything together in one place.
Strategic Resourcing’s Agency Management Suite provides HR teams and Hiring Managers with a central Performance Hub that gives complete visibility over recruitment activity.
From one dashboard, you can:
- Track recruitment agency spends across all locations.
- Monitor agency performance against KPIs.
- Compare successful placements, time to hire and total spend.
- Identify which recruitment partners deliver the strongest return on investment.
- Make informed decisions about where future recruitment budgets should be allocated.
Instead of relying on spreadsheets and disconnected reports, HR leaders gain one clear dashboard of recruitment performance, making it easier to improve efficiency and reduce unnecessary spend.
Book a demo to learn more about our Agency Management Suite and maximise your recruitment ROI today.
