A look at the real cost of hiring in-house and how outsourcing solves it
Building an internal team may seem like a smart long-term move. You get full-time support, greater control and dedicated talent. But for many businesses, particularly start-ups and scale-ups, hidden inhouse hiring costs can slow growth and drain budgets.
It’s not just about salaries. From onboarding delays to productivity gaps and legal overhead, internal hiring comes with more baggage than most decision-makers realise. Outsourcing to a trusted partner avoids these costs. Even better, using a management solution company that hires, manages and monitors output on your behalf can remove day-to-day admin too.
What You’re Really Paying For
When hiring in-house, most leaders focus on the monthly salary. But the real price includes:
- Pension contributions
- Paid leave
- Recruitment fees
- Employer taxes
- Hardware, software and desk space
- Training and development
- Sick leave, maternity or paternity cover
In the UK, employee costs can exceed 1.5 times the salary. In the US, it’s closer to 1.25 times. For a £35,000 hire, you could be looking at a £52,500 annual spend. Multiply that across several hires and the math gets serious, fast.
These hidden inhouse hiring costs often don’t appear on a budget breakdown until it’s too late.
A management solution company can often give you access to the same calibre of talent for a fixed, predictable monthly cost with fewer obligations.
Time Is Money: The Productivity Gap
Hiring takes time. The average recruitment process takes six to eight weeks, followed by onboarding and a typical three-month ramp-up. During that time, either the role is unfilled or productivity is low.
For start-ups and SMEs, this gap can delay product launches, limit campaign rollouts and add pressure on existing staff. Outsourcing avoids this entirely. Most freelancers and agencies can hit the ground running.
Better still, a management solution company can match you with qualified talent from day one. You don’t need to advertise, screen, interview or train. They handle that while you focus on outcomes.
They are built for fast onboarding and quality control. You get performance reports, structured feedback cycles and dedicated support managers.
This helps bypass hidden inhouse hiring costs that come from time lost and slower delivery.
The Risks of a Bad Hire
Hiring mistakes are expensive. A poor hire can cost up to 30% of the employee’s annual salary. This includes the cost to rehire, lost productivity and potential damage to team morale.
With in-house staff, it’s harder to pivot or remove someone quickly. Legal notice periods, HR processes and contracts make it a slow fix.
In contrast, outsourcing gives you flexibility. A management solution company will often replace underperforming talent at no cost. They are motivated to keep standards high.
This protection limits the hidden inhouse hiring costs that come with long HR processes and hiring errors.
Flexibility and Scaling
When demand increases or decreases, you need the right team size to match. That’s where in-house models often fall short. Hiring freezes, notice periods and fixed contracts make it hard to scale up or down efficiently.
Outsourcing solves this. You can ramp up talent when you need to, or reduce support during slower periods.
A management solution company takes this even further. They can assign extra capacity at short notice. If your needs shift, your team adjusts without lengthy processes or paperwork.
This means you stay agile without the usual hidden inhouse hiring costs linked to sudden change.
Legal and Compliance Overhead
Employment law is a maze. Payroll, taxes, contracts, data protection, pensions, benefits. In-house hires bring a long list of compliance responsibilities.
This means you either need internal HR expertise or a paid HR support service. Either way, it’s an added cost.
Outsourced partners manage their own legal and tax obligations. You deal with invoices, not employment admin. A management solution company offers an added layer of protection. They act as the legal employer of record, keeping your business clear of compliance risk.
This reduces hidden inhouse hiring costs that come from handling HR incorrectly or reacting too slowly to policy changes.
Why Management Solutions Work
If you’re scaling quickly or running lean, managing an outsourced team yourself can still take time. Briefing, reviewing work and chasing deliverables can become a job of its own.
A management solution company solves this. They don’t just supply the talent. They manage it for you. This includes:
- Role matching and hiring
- Daily task assignment and performance tracking
- Quality control and feedback
- Time and cost reporting
- Replacement guarantees
You get the benefits of outsourcing without the workload of managing multiple freelancers or agencies. For many businesses, this is the most effective way to avoid hidden inhouse hiring costs while maintaining high output.
Want to scale your business, while reducing the cost and risk of inhouse hiring? Chat to us today!