Play 1: Cut the Hidden Costs of Hiring

If you missed the first article in this series, Procurement’s Playbook for the New Talent Economy, start here to learn why Procurement is uniquely positioned to lead the next wave of Talent Acquisition innovation, even in a slow market.

Play 1: Cut the Hidden Costs of Hiring

When most leaders think about recruiting costs, they stop at the obvious: recruiter fees, job postings, and spend on advertising. But the true cost of hiring runs much deeper. It hides in vacancies, turnover, and inefficiency that quietly drain millions from the business every year. For CFOs and Procurement leaders, these are not just HR headaches. They are measurable financial risks that directly impact productivity, growth, and profitability.

Vacancy Costs: The Price of Empty Seats

Every day a role sits unfilled, organizations lose money. Projects stall, output drops, and existing employees are stretched thin causing a decrease in morale. In customer-facing or revenue-driving roles, the losses can multiply quickly. A $100,000 salaried role left vacant for three months can cost two to three times that amount in lost productivity and delayed output. Multiply that across dozens or hundreds of open positions, and vacancy costs quietly add up to millions in unrealized value.

Turnover Costs: Paying Twice for the Same Role

Even when positions are filled, early turnover creates another hidden drain. Replacing an employee in their first year costs 50 to 150 percent of their salary once you account for sourcing, interviewing, onboarding, training, and the lost productivity of ramp-up time. More than that, turnover destabilizes teams, lowers morale, and increases the workload of those left behind. What looks like a single resignation on paper is a compounding financial and cultural cost.

Hiring Inefficiency: Paying More for Less

Fragmented recruiting models magnify costs further. Many companies juggle multiple vendors across business units or geographies, which results in inconsistent pricing and duplicate fees, weak vendor accountability, lack of consolidated reporting, and compliance blind spots. This scattershot approach inflates cost per hire while delivering less visibility and control, the exact opposite of what Procurement demands.

Procurement’s Role in Cutting Hidden Costs

The good news is that Procurement has the expertise and leverage to uncover and reduce these hidden costs. By applying proven vendor management discipline to talent acquisition, Procurement leaders can deliver measurable savings and stronger hiring outcomes. Key moves include rationalizing vendors to eliminate duplication and increase accountability, negotiating performance-based contracts tied to time-to-fill and retention outcomes, adopting RPO models that scale flexibly and provide unified cost visibility, and integrating workforce planning with Finance and Human Resources to anticipate demand and minimize vacancy exposure.

Why Procurement Leaders Should Care

Vacancy, turnover, and inefficiency are not just HR challenges. They drain productivity, increase risk, and erode profitability. CFOs see the financial leakage, and Procurement leaders have mandate to fix it. Cutting the hidden costs of hiring is both an operational win and a financial imperative.

The Bottom Line

The true cost of hiring is often invisible on a P&L, but its effects ripple across the organization. Procurement can shine a light on these costs and take decisive action to stop the leaks. In the new talent economy, every dollar saved and every hour gained builds competitive advantage.

Schedule your complimentary Talent Acquisition Cost & Risk Assessment

Ready to cut costs, reduce risk, and future-ready your TA strategy? Contact us to request your complimentary assessment today.

Look Ahead

This article is part of Procurement’s Playbook for the New Talent Economy. Next up: Play 2 – Prepare While Others Wait. We will explore why slow markets are the ideal time for Procurement leaders to strengthen hiring infrastructure, renegotiate contracts, and build scalable models that are ready to flex when demand returns.

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