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How to Cut Hiring Costs Without Losing Quality – Fixed Fee Recruitment Explained (2025)

Updated in September 2025

How to Reduce Recruitment Costs in the UK


Recruitment costs can spiral if you’re not careful. The easiest way to reduce recruitment costs in the UK is to ditch hefty agency percentages, use fixed-fee recruitment, and tighten up your hiring process. Throw in some smart use of referrals and tech, and you’ll save serious money without losing candidate quality.


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What is recruitment cost in the UK?


When we talk about recruitment cost, we’re not just talking about the fee you hand to an agency. It’s everything tied up in hiring someone: job ads, your team’s time sifting CVs, interview hours, onboarding, even the cost of replacing someone who doesn’t work out.

The CIPD puts the average UK cost per hire at just over £6,000 in 2025. That’s a big chunk of money for every new person you bring in.


How to calculate cost per hire


Here’s a simple way to work it out:

Total recruitment spend ÷ number of hires = cost per hire

So if you spent:

  • £15,000 on agency fees

  • £3,000 on job ads

  • £5,000 worth of HR time

  • £7,000 on onboarding and training

That’s £30,000 spent. If you hired 5 people, your cost per hire = £6,000.

Once you know the number, you can see if you’re overspending.


What is fixed fee recruitment and how does it work?


Fixed fee recruitment is exactly what it sounds like. Instead of paying a percentage of the new hire’s salary, you pay one agreed-upfront fee.


Here’s the difference:

  • Agency model: 15–30% of annual salary.

  • Fixed fee model: one flat cost, often between £999 and £2,999 per role.

Let’s say you’re hiring a sales manager on £45,000:

  • Agency at 20% = £9,000.

  • Fixed fee = £1,500.

  • Saving = £7,500.


That’s money you could put straight back into training, tools, or staff perks.


How to reduce recruitment costs step by step


You don’t have to overhaul everything at once. Start with these six steps:


  1. Get the role clear. A tight job description saves wasted time later.

  2. Tap into your team. Referrals often bring in strong candidates fast.

  3. Be smart with ads. Niche boards beat expensive general ones.

  4. Use tech wisely. ATS systems and video interviews save hours.

  5. Go fixed fee. Predictable costs and no scary percentages.

  6. Focus on retention. Every re-hire avoided is money saved.


Benefits of reducing recruitment costs


It’s not just about saving cash. Cutting costs the smart way also means:

  • Less stress on HR budgets

  • Faster time to hire

  • A smoother candidate journey

  • Stronger retention rates

  • A healthier employer brand

  • Less reliance on agencies

  • More freedom to reinvest elsewhere


Top 10 tips to save money on hiring


  1. Use fixed fee recruitment partners.

  2. Set up a referral bonus for staff.

  3. Advertise on targeted job boards.

  4. Build a candidate pipeline for repeat roles.

  5. Improve your careers page – make it easy to apply.

  6. Invest in an ATS.

  7. Use short video interviews to pre-screen.

  8. Train hiring managers in interviewing skills.

  9. Make onboarding count to avoid quick leavers.

  10. Track cost per hire every quarter.


Cost of recruitment: UK averages in 2025


  • Agency fees: 15–30% of salary

  • Fixed fee recruitment: £1,000–£3,000 per role

  • Cost per hire: £6,000 average (CIPD 2025)

  • Time to hire: 6–8 weeks in the UK


Best way to cut recruitment agency fees


The most effective move? Swap percentage agencies for a fixed fee provider.

For a mid-level role (£35k salary), an agency at 20% charges £7,000. A fixed fee deal might cost £1,500. That’s a saving of over £5,000 per hire.


Common mistakes to avoid when cutting costs


  • Going too cheap. If the service is bargain-basement, the candidates probably will be too.

  • Weak job descriptions. Vague ads bring in the wrong people.

  • Ignoring candidate experience. Treat applicants badly and your brand suffers.

  • Skipping onboarding. You’ll just end up rehiring.

  • Not tracking results. If you don’t measure cost per hire, you can’t fix it.


Emerging recruitment cost trends for 2025


Here’s what’s shaping the UK hiring scene right now:

  • AI recruitment tools. From CV screening to chatbot interviews.

  • Employer branding. Candidates want proof of values and culture.

  • Remote hiring. Wider talent pools, lower relocation costs.

  • Data-driven hiring. More firms tracking time-to-hire and ROI.

  • Flexible staffing. Contractors and project-based roles cutting overheads.


FAQs


1. What is the average recruitment cost per hire in the UK?

It’s about £6,000 in 2025, according to CIPD.

2. How much do recruitment agencies charge?

Most charge 15–20% of salary, up to 30% for senior roles.

3. Is fixed fee recruitment worth it?

Yes – for most roles it’s cheaper and more predictable.

4. Can cutting recruitment costs hurt quality?

Not if you do it properly. The trick is to save on process, not on candidate quality.

5. How quickly can you see savings?

Often straight away – your first fixed fee hire could save thousands compared to agency rates.


Conclusion


Here’s the thing: recruitment will always cost money. But it doesn’t need to cost a fortune. By tightening up your process and moving to fixed fees, you can save thousands without losing quality.

 
 
 
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