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Your Recruiting Budget’s Largest Line Item is Agency Fees

It goes without saying that recruiting leaders need a well-planned recruiting budget to ensure top quality hires in the next year.

As a recruiting leader, you probably don’t have a lot of control over your budget. That doesn’t have to be the case – if you bring the right information to the discussion, you’ll be able to advocate for the budget you know that you need to get the job done.

The right tools and information will provide you with insights to strategically budget for 2016, which is slated to be a stronger hiring year than 2015.

“Department of Labor data on workforce trends indicates that hiring is definitely increasing within spikes, while layoffs and voluntary separations have stabilized.” –

This increase indicates a larger focus on hiring and recruitment within the human resources (HR) budget this year. Without a strategic budget, you’ll be caught in the hiring upswing as a reactive player. Be a proactive player by strategically planning the largest chunk of your recruiting budget – direct hire recruiting agency spend.

Your only speed bump is the chaos surrounding agency use that often leads to it being put on the back-burner – it’s seen as too complicated to analyze.

Instead of pushing it off, let’s stop pretending that agency spend doesn’t exist and get proactive about how to budget for direct hire recruiting agencies in 2016.

Even the best recruiting teams focus their efforts on talent pools – agency use is here to stay.

recruiting budget

Think about your recruiting spend – the fees you award to direct hire recruiting agencies are significant. So, why are we pretending that it won’t get spent?

Instead, be proactive and plan for agency use – agencies’ niche expertise, skills and access to a wider talent pool means their presence in recruiting will be a lasting one.

The first step is taking control. If you mean to control your recruiting budget conversation, you have to be armed with the best data.

Data can show you how it’s best to spend your recruiting budget – but you don’t necessarily need a technology solution to approach your recruiting agency relationships more strategically.

Your unique understanding of what makes a quality recruiting agency, as well as information on your agencies’ performance in the past will provide you with the right foundation.

If you’re approaching your recruiting budget with a reactive mindset – be proactive with knowledge-driven insights.

recruiting budget

Using recruiting insights proactively allows you to be a part of the larger budgeting conversation for the upcoming year, streamline your recruiting process for better efficiency, and empower yourself in the eyes of your peers and leaders – but how do you know what kind of data you should collect to make sure this is done successfully?

Take a look at some of the common topics of interest from recruiting business leaders across organizations:

  • Time-to-fill
  • The average agency spend by time period, department, and industry
  • Employee success based on agency origin
  • Any other metrics important to your company or industry

If you’re unsure how to define metrics that may be specific to your organization’s personal talent acquisition goals, take a look at how you define success in your internal recruiting team. Assessing your agencies’ performance with these same benchmarks will ensure that your direct hire recruiting agency is effective.

If you have one focus this year, make it this: look at your vendor list of direct hire recruiting agencies and determine how your organization defines a successful hire, and therefore, a quality agency.

This will not only make budget season run more smoothly, but will provide you with a solid foundation on which to build a strategy for your organization’s agency use.

We know exactly how much of a pain it is to budget for agency spend. Check out our Recruiting Leader’s Guide to Direct Hire Agency Search Planning for 2016 to improve your 2016 budget.


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