How to Make Tech Hiring Cost-Effective?

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Did you know that the average cost per hire hovers around $4,700? However, this figure only scratches the surface. Many employers estimate that the total cost to hire a new employee can soar to three to four times the position’s salary. For instance, a job that pays $60,000 annually could cost $180,000 to fill. 

In this context, looking for cost-effective hiring options becomes a priority for businesses. However, don’t chase the cheapest option only because it is the cheapest. Instead, we suggest looking at the bigger picture analyzing a cost-value ratio, and aiming to optimize both the expenditure and the long-term value derived from each new hire. In this article, through a closer look at various strategies for cost-effective tech hiring, we aim to guide businesses in refining their recruitment processes, ensuring they invest wisely in their team’s growth and success.

Table of Content

Understanding the Costs of Tech Hiring

Tech hiring is an investment with a myriad of associated costs, extending far beyond the surface-level expenses many companies initially consider. To truly grasp the financial implications of recruitment in the tech industry, it’s essential to categorize these costs into direct, indirect, and hidden expenses. By doing so, organizations can make more informed decisions and implement strategies to optimize their hiring processes.

Direct Costs

Direct costs are the most apparent expenses involved in the hiring process. These include:

  • Advertising Job Vacancies: Costs associated with posting open positions on job boards, social media platforms, and industry-specific sites.

  • Recruiting Tools and Software: Investments in Applicant Tracking Systems (ATS), recruitment marketing platforms, and other technology solutions designed to streamline the hiring process.

  • Agency Fees: For companies that outsource their hiring efforts, fees paid to recruitment agencies represent a significant direct cost. These fees can range from a flat rate to a percentage of the hired candidate’s first-year salary.

  • Interviewing and Assessing Candidates: Expenses related to conducting interviews, including travel costs for candidates, assessment tools, and the time spent by staff in interviews and evaluations.

Indirect Costs

Indirect costs may not be immediately apparent but significantly impact an organization’s resources:

  • Time Spent by Internal Teams: The hours devoted by HR, hiring managers, and potential team members to the hiring process, including reviewing applications, conducting interviews, and making decisions.

  • Opportunity Costs of Unfilled Positions: The lost productivity and potential revenue that could have been generated if the position were filled sooner.

  • Onboarding and Training: The resources required to bring a new employee up to speed, including training materials, the time of trainers or mentors, and any specialized training programs.

Hidden Costs

Often overlooked, hidden costs can have a profound impact on an organization’s bottom line and morale:

  • Impact of a Bad Hire: Hiring the wrong candidate can lead to decreased team morale, disrupted projects, and the need for additional supervision and correctional training.

  • Lost Productivity: The time during which a new hire is not yet fully productive represents a hidden cost, as does the time taken to rectify mistakes made by underperforming employees.

  • Cost of Re-hiring: If a new hire doesn’t work out, the company must bear the cost of terminating their employment and starting the hiring process anew, which includes all associated direct and indirect costs. According to our calculation, the cost of churn for one senior developer might reach as high as $64,000.

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Measuring Cost-Effectiveness in Tech Hiring

Before measuring cost-effectiveness, companies need to have a comprehensive understanding of all costs involved in the hiring process, as outlined in the previous section. This includes direct, indirect, and hidden costs. Accurately accounting for these expenses is the first step in evaluating the efficiency of recruitment strategies.

The quality of hire is a pivotal metric in determining cost-effectiveness. This can be evaluated through various indicators, such as:

  • Job Performance: Assessing the contributions and impact of new hires on company projects and goals.

  • Cultural Fit: How well new employees integrate into the company culture and contribute to a positive work environment.

  • Retention Rates: The ability of new hires to stay with the company over time, reducing the need for frequent re-hiring.

Options for Cost-Effective Tech Hiring

The high demand for skilled professionals drives up hiring costs, making it crucial for businesses to explore cost-effective recruitment strategies. This section delves into various approaches to optimize hiring budgets without compromising talent quality.

In-house Recruiting vs. Agencies

Deciding between managing recruitment in-house and cooperating with specialized agencies hinges on cost-effectiveness and efficiency. In-house recruitment allows for greater control over the hiring process and potentially fosters a deeper understanding of candidates’ fit within the company culture. However, it requires significant upfront investment in recruitment tools, team salaries, and ongoing training.


  • Control: Offers complete control over the recruitment process, allowing companies to closely align hiring practices with organizational culture and values.
  • Brand Knowledge: In-house teams have a deep understanding of the company, which can lead to more accurate job descriptions and better candidate fit.


  • Resource Intensive: Requires significant investment in HR departments, including staff salaries, training, and recruitment technologies.
  • Limited Reach: May have a smaller candidate reach compared to specialized agencies with extensive networks.

Conversely, outsourcing to recruitment agencies, while initially seeming costlier due to service fees, can be more economical for companies without the bandwidth to maintain a dedicated recruitment team. Agencies offer expertise in sourcing candidates faster, with access to a broader talent pool and specialized recruitment technologies. The choice between the two methods depends on the company’s size, hiring volume, and strategic priorities.


  • Expertise: Recruitment agencies have specialized knowledge and access to a wider talent pool, including passive candidates
  • Efficiency: Can be more efficient for roles that are hard to fill, reducing the time and effort required by in-house teams.


  • Cost: Can be expensive, with agencies typically charging a percentage of the hire's first-year salary.
  • Less Control: Companies have less control over the recruitment process, which can lead to misalignments in candidate expectations and company culture.

Leveraging Technology

Artificial intelligence (AI) and machine learning tools, applicant tracking systems (ATS), and recruitment marketing platforms can significantly streamline the hiring process. These technologies automate repetitive tasks, such as resume screening and initial candidate assessments, allowing recruiters to focus on more strategic aspects of hiring. By reducing the time and manpower needed for these tasks, companies can lower their overall recruitment expenses. Additionally, these tools can improve candidate experience and help attract top talent by making the application process more engaging and efficient.


  • Efficiency: Streamlines the recruitment process, from candidate sourcing to screening, significantly reducing time-to-hire.
  • Data-Driven Insights: Offers valuable insights into recruitment metrics and candidate engagement, helping to refine strategies over time.


  • Initial Investment: Requires upfront investment in software and potential training for HR staff.
  • Overreliance Risk: Overreliance on technology can lead to overlooking potential candidates who might not fit the exact criteria but would otherwise be a good match.

Employee Referrals

Employee referral programs are a highly cost-effective recruitment strategy. Referred employees often have higher retention rates and integrate faster into the company culture, reducing long-term recruitment and training costs. Furthermore, leveraging the networks of existing employees can shorten the hiring timeline, as it bypasses the initial stages of candidate sourcing and screening. Offering incentives for successful referrals can further motivate employees to recommend qualified candidates, enriching the talent pool with minimal expenditure.


  • Cost-Effective: Reduces the need for extensive advertising and external agencies.
  • High Quality: Referrals often lead to hires who fit well with the company culture and have higher retention rates.


  • Limited Pool: This can limit the diversity of the candidate pool if not managed alongside other recruitment strategies.
  • Bias Risk: Increases the risk of nepotism or biases in the hiring process.

Remote and Global Hiring

Expanding the search for talent beyond local geographies by hiring remote workers or tapping into global talent pools can uncover cost savings and access to a broader range of skills. Remote hiring eliminates the need for physical office space, reducing overhead costs. Additionally, global hiring can allow companies to benefit from variations in salary expectations across different regions, potentially lowering wage costs. However, this approach requires careful consideration of time zone differences, cultural nuances, and communication strategies to ensure effective collaboration.


  • Wider Talent Pool: Access to a global talent pool allows companies to find candidates with the specific skills they need.
  • Cost Savings: Potential savings on salaries and overhead costs, as remote workers may be based in regions with lower living costs.


  • Cultural and Communication Challenges: Managing a remote, globally dispersed team can introduce communication hurdles and cultural misunderstandings.
  • Legal and Operational Complexities: Different countries have varying employment laws and regulations, which can complicate hiring and payroll processes.

Leverage the Global Talent Pool Through Offshore Tech Staffing

If you decide to tap into the global talent pool – truly a cost-effective option that still allows you to hire top tech talent – there is a way to mitigate its challenges, and it is offshore tech staffing delivered by TurnKey. Let us explain why.

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Custom Recruitment for Seamless Cultural Integration

TurnKey Staffing distinguishes itself by offering custom recruitment solutions tailored to the unique needs and culture of your business. Understanding that cultural fit is as crucial as technical proficiency, TurnKey ensures that the developers you onboard are not just skilled, but also align with your company’s ethos, promoting seamless integration and collaboration.

Transparent and Empowering Compensation Model

Transparency in compensation is a cornerstone of TurnKey’s approach. Clients are provided with clear visibility on what their developers are paid, affording them the ability to dictate compensation directly. This empowerment extends to decisions around promotions, raises, and equity grants, ensuring that remuneration remains competitive and fair, and fostering a sense of loyalty and commitment among offshore developers.

Strategic Seniority Selection and High Retention

With TurnKey, you retain complete decision-making power over the seniority of your developers, thanks to a capped fee structure that prioritizes your control over staffing decisions. This approach not only enables precise alignment with project needs but also contributes to exceptionally high retention rates. Developers feel valued and financially secure, forging a deep emotional connection to your projects and collective success.

Beyond Traditional Staffing: EOR Services and Developer Retention

While TurnKey Staffing’s services may not be the least expensive compared to traditional recruiting agencies, the value provided extends far beyond mere staffing. TurnKey goes the extra mile by offering Employer of Record (EOR) services. These services alleviate the burdens of legal and operational complexities associated with global hiring, making TurnKey’s offering exceptionally valuable.

In summary, TurnKey Staffing stands out as a premier partner for companies looking to leverage the global talent pool. By addressing the main challenges of offshore tech staffing with innovative solutions, transparent practices, and comprehensive support, TurnKey not only facilitates the integration of global talent but also ensures their long-term retention and success within your organization.

Hire top developers with TurnKey


Navigating the complexities of tech hiring requires a strategic approach that balances cost with the long-term value of new hires. Each approach we outlined offers unique benefits and challenges, but the underlying principle remains the same: optimizing the recruitment process to find the right talent at the right cost.

Adopting these strategies enables organizations to not only reduce recruitment costs but also to enhance the quality of their hires, ensuring a better fit for the company culture and a higher likelihood of long-term success. By carefully considering the pros and cons of each option and implementing the most suitable approaches, companies can build a strong, diverse, and dynamic tech team that drives innovation and growth in the competitive tech landscape.


How can companies ensure they're getting the best value for their investment in tech recruitment?

To ensure the best value for their investment in tech recruitment, companies should adopt a strategic approach that balances cost with quality. This includes leveraging advanced recruitment technologies to streamline processes, utilizing employee referral programs to access pre-vetted talent, and exploring flexible staffing solutions like freelance or contract workers. Additionally, focusing on long-term benefits such as employee retention and cultural fit can significantly enhance the cost-effectiveness of hiring practices.

What are the main advantages of using offshore tech staffing firms like TurnKey Staffing?

Offshore tech staffing firms like TurnKey Staffing offer several advantages, including access to a global talent pool, which can help fill roles with highly specialized skills in competitive markets. TurnKey’s model, which emphasizes transparency in compensation and fees, allows clients to retain control over salary decisions while benefiting from competitive pricing and high retention rates due to the firm's focus on cultural fit and developer loyalty. This approach addresses common challenges associated with global hiring, such as cultural and operational complexities, making it a valuable strategy for companies looking to expand their tech teams cost-effectively.

March 26, 2024

TurnKey Staffing provides information for general guidance only and does not offer legal, tax, or accounting advice. We encourage you to consult with professional advisors before making any decision or taking any action that may affect your business or legal rights.

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