How Much Does It Cost to Hire a New Employee in the UK?

Hiring a new employee might seem like a straightforward process – post a job ad, hold a few interviews, and boom: you're onboarding your next superstar. But beneath the surface, there’s a hefty price tag attached. From advertising to training, the real cost of bringing someone new into your business can quickly snowball.

Whether you’re growing your team or replacing a leaver, understanding the true cost of hiring in the UK is essential for planning your people strategy and protecting your bottom line.

Let’s break it all down.

The Average Cost to Hire in the UK

According to various studies, the average cost to hire a new employee in the UK is around £3,000 to £5,000 – but this can rise significantly depending on the role and the method of recruitment.

Here’s where that money typically goes:

• Advertising the role

• Recruitment agency fees

• HR time and admin

• Interview time (panel prep, candidate review, feedback)

• Onboarding and training

• Lost productivity while the new hire gets up to speed

In some sectors, particularly technical or senior roles, costs can soar beyond £10,000 per hire. Yikes.

Breaking Down the Costs

Let’s take a closer look at where that money disappears to...

1. Recruitment Advertising

Posting on job boards like Indeed, Totaljobs or LinkedIn isn't always free. Premium listings and sponsored posts can cost anywhere from £100 to £500 per vacancy, depending on your visibility needs and how long the role remains open.

2. Recruiter or Agency Fees

If you’re using a recruitment agency (hi from The Hiring Guru 👋), you’ll typically pay 15–25% of the candidate’s first-year salary as a fee. So for a £35,000 role, that’s anywhere from £5,250 to £8,750.

Pro tip: Not all agencies are created equal. Some (ahem) offer better value, starting at 10%, without compromising on quality. Just saying.

3. HR & Internal Hiring Time

Even if you're hiring in-house, there's still a cost attached to your HR team’s time – or yours, if you’re a business owner wearing 10 hats. Reviewing CVs, arranging interviews, and managing offers adds up fast.

Assuming:

• HR spends 20 hours on the hire at £25/hour = £500

• Line manager interviews for 6 hours at £40/hour = £240

Total = £740+ in internal time alone.

4. Onboarding and Training

It can take 3 to 6 months (sometimes more) for a new hire to reach full productivity. During that time, they’re soaking up your team’s time, asking questions, and getting the lay of the land.

Training costs vary by industry but average between £1,000 and £3,000 per employee, especially when factoring in shadowing, courses, and materials.

The Hidden Cost: Lost Productivity

You’re not just paying for the new hire – you’re also absorbing the cost of a seat left empty, which could mean missed opportunities, delayed projects, or overworked teams.

Plus, if a new hire doesn’t work out? You're back to square one, and the cost doubles.

How to Lower the Cost of Hiring

Now for some good news: there are ways to trim these costs without cutting corners.

✅ Build a Talent Pipeline

Keep warm relationships with great candidates – even when you’re not hiring. That way, when you are, you’re not starting from scratch.

✅ Use Social Media and Employee Referrals

Get strategic with LinkedIn or encourage staff to refer candidates. Referred hires often cost less and stay longer.

✅ Invest in Retention

Every new hire is a big investment, so keeping hold of them makes business sense. If you can improve culture, engagement, and development, you’ll lower your turnover – and your hiring costs.

✅ Work with a Cost-Conscious Recruiter

(Shameless plug incoming.) Not all agencies charge eye-watering fees. At The Hiring Guru, we combine over 20 years of recruitment know-how with low fixed fees to help you hire smart, not expensively.

Final Thoughts

Hiring a new team member in the UK costs more than you think – and not just in pounds and pence. Time, energy, and team morale are all on the line when you’re growing your business.

Understanding these costs upfront means you can make better decisions, whether that’s budgeting properly, investing in retention, or choosing the right recruitment partner.

Because the real cost of hiring? Is doing it badly.

Want help finding your next hire without blowing the budget?

Contact The Hiring Guru to get started – or just to talk recruitment over a virtual cuppa ☕.