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The cost of closing a vacancy is usually calculated in one move: take the external partner’s fee and compare it to the salary of an in-house recruiter. The comparison is broken by construction. The first number is one-off and tied to an outcome, the second is recurring and tied to nothing. What comes out of it is not a management decision, only a feeling that one model costs more than the other.
What needs to be calculated is the true cost per hire. It contains at least six cost items, of which two typically appear in the budget. Below: the formula, three hiring models, and the point where one model becomes cheaper than the other. The gap between the two numbers is widest on engineering roles, which is where most of this article’s examples come from.
Six items that are almost never consolidated into a single budget line.
1. Direct channel spend. CV database access, paid job postings, sourcing tools and their renewals. This is the one item companies always track, because it goes through invoices and consolidates easily for any period.
2. Recruiter compensation. Salary, taxes and contributions, workplace, equipment, software licences. This item recurs every month regardless of how many vacancies are open and whether a single one closed that month.
3. Hiring manager and team time. Hours spent on interviews, take-home assignments and candidate debriefs, converted into the hourly cost of those people. On engineering roles this item routinely exceeds direct channel spend, because a technical assessment pulls in several people at mid-level and above, and each stage removes them from delivery work.
4. Cost of the vacancy standing open. Output not produced for every day the role is unfilled. For roles with direct revenue impact it is calculated through margin per employee, for engineering and service roles through the cost of the function not being performed, or through the overtime it pushes onto the rest of the team.
5. Cost of a bad hire. The cost of repeating the search plus the salary and onboarding already spent, multiplied by the share of hires who do not clear probation.
6. Process management. HR director or department head time spent framing the role, calibrating requirements and consolidating feedback. Small in hours, expensive per hour.
The standard cost per hire metric counts only what passes through invoices:
| cost per hire = (internal costs + external costs for the period) / number of hires in the same period |
Internal costs are items 2 and 6, external costs are item 1. Items 3, 4 and 5 are excluded, which is exactly why the metric understates what hiring actually costs.
The true cost per hire accounts for all six:
| true cost per hire = (items 1-6 for the period) / number of hires in the same period |
The difference between the two numbers is the portion of cost the company carries without seeing it. In most companies the cost of a vacancy standing open exceeds items 1, 2 and 6 combined, yet it almost never enters the calculation: it passes through no invoice and occupies no line in any report. This biases every model comparison toward the conclusion that waiting one more month is the cheaper option, when waiting is the most expensive part of the process.
The monthly cost of the function consists of salary, taxes, tooling and workplace. That sum appears identically every month, regardless of how many roles are open or whether anyone started.
Cost per hire is the monthly cost of the function divided by the actual number of closings. The emphasis belongs on “actual”: planned and real volumes differ in most companies, so the calculation has to run on the last twelve months rather than on intent.
A realistic workload range for one recruiter on the Kyiv market looks like this. High-volume roles with a large candidate pool: four to eight closings per month. Mid and senior specialists, where part of the search runs on direct outreach: one to three. Leadership roles: one closing every one to two months. The spread inside each group is wide and depends primarily on how much of the process is cold outreach rather than inbound response.
From this follows the main property of the model. At one hire per quarter the in-house cost per closing becomes several times higher than any external alternative, because a fixed cost is divided by too few outcomes. At three or more hires per month the same sum is spread across a flow and cost per hire drops fast.
The second property is about role types rather than money. In-house recruiting degrades systematically on rare and senior technical roles, and the reason is not the recruiter’s competence but the structure of their working day. A recruiter running a pipeline of high-volume vacancies does not maintain a warm pool on narrow stacks and does not practise direct outreach daily. On a rare role they spend three times the effort at the same salary, and that overspend never appears in any cost per hire figure.
Payment is tied to the candidate actually starting. In months without hiring the cost simply does not arise, which is the fundamental difference from the first model, where the sum is fixed and independent of load.
The second difference concerns item 5. When the partner provides a replacement guarantee, the cost of a bad hire moves to their side and drops out of the company’s calculation. This does not reduce the probability of a bad hire, it changes who pays for it, and for calculation purposes the item can be set to zero. Tooling and database access disappear from the company’s side for the same reason: they are carried by the recruitment agency Kyiv based, or by another external provider, rather than by the client.
The trade-offs run as follows. Cost per hire is fixed and does not decrease with volume: the fifth hire costs the same as the first, whereas in-house each additional hire in a month makes every previous one cheaper. Operational visibility into the search is lower, the company sees outcomes rather than daily activity. Upfront it requires the hiring manager’s time in a proper briefing, and output quality depends on that briefing more than on any other single factor, particularly on technical roles where the difference between two similar-looking requirement sets is the difference between a two-week and a two-month search. Finally, the variance between individual providers is larger than the variance between the models themselves, which makes choosing a model and choosing a provider two separate decisions.
The split inside a hybrid model runs on repeatability rather than on difficulty. In-house covers high-volume, regular and predictable roles where pipeline speed and an accumulated database matter. The external partner covers rare, senior and confidential positions where search depth and access to people who are not looking matter more.
A workable rule: if a role of that type has come up three or more times in a year, it belongs in-house. At one or two occurrences, maintaining internal expertise for it costs more than buying the outcome externally.
Most mid-sized Kyiv companies already operate this way without describing it as a model. The decision on where a given vacancy goes is made situationally, by recruiter workload or by whoever is most frustrated that week, rather than by rule. As a result the hybrid underperforms what it could deliver: the spend is already split across two channels while the split itself is unmanaged.
The point where one model becomes cheaper than the other is a single calculation.
| N = monthly cost of the in-house function / cost of one external closing |
N is the number of hires per month from which in-house becomes cheaper. Substituting the company’s own figures from the first section produces its own parity point rather than a market average. The general picture across typical volumes looks like this.
| Hiring volume | What is cheaper | Why |
|---|---|---|
| up to 1-2 hires per month | external partner | fixed cost divided across too few closings |
| 3-5 hires per month | depends on role mix | uniform roles favour in-house, mixed roles favour a partner |
| 6 or more hires per month | in-house or hybrid | the cost of the function dissolves into the flow |
The table holds under one condition: the roles inside that volume are broadly uniform. As soon as the portfolio carries a high share of rare and senior technical positions, the parity point moves up, and moves sharply.
A company running six hires a month, one of them a leadership role and two at mid-management level, sits economically closer to the second row of the table than to the third. The volume looks large; in practice the in-house recruiter will carry the routine pipeline and spend disproportionate time on the three difficult positions, generating open-vacancy time, which is the most expensive item in the first section. Parity therefore has to be calculated separately for each role group rather than for total hiring volume.
The formulas above produce a figure for today, and that figure moves with the market.
A structural gap of 89 thousand people. As of early May 2026 the unified vacancy portal, which aggregates the State Employment Service database and the leading Ukrainian job boards, carried 230 thousand open vacancies against 141 thousand people registered as job seekers. The employer’s market is over: candidates choose between several offers at once, and a vacancy budgeted below market does not lose the competition, it never enters it.
The Kyiv median sits at 35,000 UAH, with half of all postings between 21,000 and 61,000. Work.ua reports these figures as of May 2026 across more than 53 thousand vacancies. This is an all-industry median and it is precisely why it cannot serve as a benchmark for anything technical: engineering roles sit far above it, and a threefold spread inside a single city means “the market average” is unusable as a budgeting input. Ranges have to be checked against data for the specific role and seniority.
Kyiv salaries grew 20 percent year on year. According to Work.ua, the average salary in the capital rose from 30 to 36 thousand UAH over the year: employers offered 32.5 thousand on average at the start of 2026, exceeded 33.9 thousand by spring, and continued upward. A salary structure approved a year ago is roughly a fifth out of date. This lands directly on item 4: a vacancy carrying last year’s range does not become cheaper, it becomes longer, and the salary difference is fully consumed by open-vacancy cost.
Requirements are dropping on high-volume roles and holding on senior ones. Facing a talent shortage, employers increasingly hire people without prior experience: at the end of 2023 such candidates could access 36 percent of vacancies, and the share has grown since. That is a working adaptation mechanism for a routine pipeline, and it does not exist on leadership and rare technical roles, where hiring without experience is not an option. This is why the gap in time to hire between the two groups keeps widening, and why the hybrid model degrades first: the same internal function that filled a leadership role in two months a year ago now spends longer on it, and does so at the expense of the routine pipeline.
The demographic frame. UN figures put 5.3 million Ukrainians abroad, a significant share of them of working age, with roughly 700 thousand more mobilised into the armed forces. On male-dominated operational and production roles this simultaneously extended search duration and increased the share of candidates who do not reach a start date after terms are agreed, which means items 4 and 5 both became more expensive at once.
Remote work and relocation have dissolved the concept of a Kyiv vacancy. A Kyiv-based company competes for a candidate who may be physically anywhere, and conversely a Kyiv-based candidate receives offers from everywhere, including hard-currency offers from foreign employers. Geography stopped narrowing the pool and stopped protecting it at the same time.
Seven figures to pull from your own data for the last twelve months.
Dividing item 2 together with the calculated values from items 3 to 7 by item 1 produces your true cost per hire rather than the baseline SHRM figure. From there it can be compared against any external alternative on equal terms, instead of setting a one-off payment against a monthly salary.
FAQ
Included: direct channel spend, recruiter compensation with taxes, hiring manager and team time spent on assessment, the cost of the vacancy standing open, the cost of a bad hire, and management time spent running the process. The last three are usually left out, because they pass through no invoice and occupy no separate line in any report.
An unfilled role means the function is either not being performed or is being performed through other people’s overtime. Both have a monetary value: lost margin for roles with direct revenue impact, or the cost of colleagues’ time for engineering and service roles. That sum accumulates daily and typically exceeds every other hiring cost item combined.
On the Kyiv market the benchmark runs as follows: four to eight closings on high-volume roles, one to three on mid and senior specialists, and one closing every one to two months on leadership positions. The spread inside each group is wide and depends primarily on how much of the process is direct outreach: the more cold contact involved, the lower the throughput.
Add the cost of repeating the search, the salary paid with taxes for the time worked, and onboarding costs, then multiply the total by the share of hires who did not clear probation over the last twelve months. The result is distributed across all hires in the period and added to the cost of each closing.
