How to Reduce Cost-per-Hire with Automation and Assessments
The average cost-per-hire is €4,000-€7,000. With smart automation and assessments, you can halve that. Here's how.
Door Ingmar van Maurik · Founder & CEO, Making Moves
The cost-per-hire formula
Cost-per-hire is one of the most widely used metrics in recruitment, and simultaneously one of the most misleading. The standard formula is:
Cost-per-hire = (internal costs + external costs) / number of hires
The average cost-per-hire in the Netherlands is between €4,000 and €7,000 for standard positions. For specialized or senior positions, it can rise to €15,000-€25,000. And if you engage an external recruitment agency, you're easily looking at €10,000-€20,000 per placement.
But this formula doesn't tell the full story. It misses two crucial elements:
1. The quality of the hire — a cheap hire who leaves after 6 months is ultimately far more expensive
2. Hidden internal costs — the hours of hiring managers and team members that rarely get counted
In this article, we show how to structurally reduce cost-per-hire without sacrificing quality — and how with the right investments, you can actually make better hires at lower costs.
Where does the money go?
To reduce cost-per-hire, you first need to understand where the money goes. Costs break down into two categories:
External costs
Internal costs (often underestimated)
At an internal hourly rate of €75 for a recruiter and €100 for a hiring manager, internal costs already reach €4,000-€6,000 per hire — excluding external costs.
The hidden money wasters
Additionally, there are costs almost nobody counts:
The five levers for lower cost-per-hire
Lever 1: automate screening (biggest impact)
Most recruiter time goes to screening: reading CVs, phone screening, conducting first interviews. This is repetitive, time-consuming, and inconsistent work.
With AI, you automate the heavy lifting:
Total savings: 60-80% of screening time, which translates to 15-25 hours per vacancy. At an internal hourly rate of €75, that's €1,125-€1,875 per vacancy.
Lever 2: better assessments = fewer bad hires
This is the lever most often overlooked. Every bad hire costs €50,000-€150,000. If you improve hire quality, you save multiples of the assessment investment.
Calculation example at 100 hires per year:
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The difference between generic assessments and custom assessments is €500,000-€700,000 per year — a return that justifies any investment in your own system.
Lever 3: increase job page conversion
An average job page has a conversion rate of 8-12% (visitors who actually apply). With an optimized job page, you can increase that to 30-50%.
What does this mean for cost-per-hire?
Lever 4: reduce dependency on recruitment agencies
Recruitment agencies are the most expensive way to hire. At a fee of 20% on a €60,000 salary, you pay €12,000 per placement. If 30% of your hires go through agencies (at 100 hires = 30 placements), that's €360,000 per year.
With your own hiring system, you can drastically reduce that dependency:
A reduction of agency dependency from 30% to 10% saves: 20 placements x €12,000 = €240,000 per year.
Lever 5: own system vs. SaaS stack
The average recruitment department uses a fragmented stack:
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That's €14,400-€45,600 per year on separate tools that don't work together optimally. With your own integrated system:
The full picture: halving cost-per-hire
Let's add everything up for a company making 100 hires per year:
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Even with conservative calculations, you can reduce cost-per-hire from €5,000-€7,000 to €2,000-€3,000 — a halving that directly translates to the bottom line.
Implementation path: where to start?
You don't have to do everything at once. The most effective path:
Phase 1: Quick wins (month 1-2)
Phase 2: AI screening (month 2-4)
Phase 3: Own system (month 4-6)
Key takeaways
Reducing cost-per-hire isn't about cutting quality. It's about smarter investing in your recruitment process:
The companies that most effectively reduce their cost-per-hire aren't the ones cutting corners. They're the ones investing in a system that pays for itself.
Want to know what savings opportunities exist for your organization? Schedule a conversation and we'll calculate it for you.