How Do I Know When the Right Time Is to Employ Someone New?

We explore the key financial considerations to make when asking yourself whether it’s the right time to employ someone new.


Picture this: Your recurring revenue numbers are starting to climb each month. Your inbox has more and more enquiries trickling in each time you check it. You’re getting noticed at networking events, your social media accounts are buzzing with likes and follows, and your company workload is starting to feel like almost too much to handle.

That’s business growth, and it’s a strong indication that you need to start thinking about employing someone new.

Hiring a new member of the team presents a logistical challenge for all businesses, not just those in the recruitment industry. If you bring someone on board too early then you may find that your profits take a hit, but if you deliberate for too long then the rest of your team might be in danger of burning out as they struggle to accommodate an excessive workload.

When you’re in the early days of business growth, hiring someone new can feel like a leap of faith. But it’s a key part of the process of continual growth, and whilst the financial benefits may not be immediate, it’s an investment that will free up the time needed to ensure your recruitment business continues to succeed.

If you’ve been considering whether a new hire would be an asset to your recruitment business, but aren’t sure if your budget can take it, never fear. We’re here to take you through the key financial considerations to make when asking yourself whether it’s the right time to employ someone new.

But first…

Does my Business Need another Employee?

Before we get into the nitty-gritty of whether you’re in the right place to onboard a new team member, there are several questions it can be worth asking yourself:

  • Are my Sourcers doing full 360 roles? 
  • Senior Consultants back at the sourcing desk?
  • Have I had to turn down new business because we don’t have time to take on new work?
  • Can my finances stretch to another member of staff who may not start turning a profit right away?
  • Do you have enough work to fill the time of a new full time or part-time employee?

Rather than asking yourself whether you can afford to hire an employee, try asking yourself whether you can afford not to. It’s important to ride the momentum of a growing recruitment business if you want to continue the upwards trajectory, and you can’t do that if you’re bogged down with administrative tasks or helping other staff stay on top of their work.

A new hire can give back the time you need to strategically plan your next stage of business growth. This could be the difference between making it in the industry and falling short of success, so it’s not a decision that should be taken lightly.

Still unsure whether your business is in the right place to employ someone new? Read on for what else you need to consider.


As a business in the recruitment industry, we don’t need to explain to you the costs associated with sourcing a candidate for a new role. Whatever approach you take, you’ll either need to pay a rec-to-rec agency to help you out or sacrifice a valuable chunk of time to headhunt, post ads, review CVs and conduct interviews. It’s a necessary expense both financially and from a time perspective, but one that will need careful forward planning to make a minimal impact.

Salary and Benefits

A new employee’s salary will have the biggest financial impact on your recruitment business, especially for the first few months. You’ll also have to factor in a new addition to your pension scheme and any benefits like health care or travel expenses.

Good financial forecasting is the best way to decide whether you’ve got the budget to hire somebody new, which is why it can be so beneficial to work with a recruitment accountancy firm to ensure that your business is in the right position to expand.

Tax Implications

When you’re an employer, you’ll be responsible for paying Employer National Insurance rates. In most cases, this will be set at 13.8% for the tax year 2021-2022, and you’ll also have to pay the same rate on any expenses and benefits as well. 

On an average salary in the recruitment industry, you’ll be looking at an estimated cost of £3,614 for a new employee joining your team. If you’re a start-up, you’ll also likely have to invest in the software required to run a PAYE scheme, which bumps the total up even more.

Equipment and Software

Whilst not relevant for every recruitment business, things like office space and equipment are something to consider when it comes to the cost of a new employee. Expanding a team means finding the space for someone new which could involve buying a desk and office chair as a minimum, along with things like a new laptop or computer and a phone for work.

You will also have to consider the cost of purchasing software for your new employee, such as an ATS seat in a system like Bullhorn. A LinkedIn recruiter license may also be required, along with new accounts on other platforms that may require a fee to join.


No matter the level of experience that your new hire has, some training will be necessary when they join the team. In the age of remote and hybrid working, this can present a logistical challenge as well as a financial one, with virtual onboarding and training needing to be organised once a new employee starts their job.

Ideally, another member of your team will be able to deliver the necessary training, so in most cases you won’t have to pay for any courses or certifications. However, also consider that until a new employee is fully trained, they won’t be able to make placements and start billing. Be sure to factor in how long it could take before your investment starts to pay off.

Culture Fit

Cultural fit is the most important thing to consider when bringing new people into a business. Whilst technical ability will be considered and likely have weight when it comes to picking a candidate, a new employee won’t last long at a new company if their values aren’t in alignment and they don’t gel with the rest of the team.

Gauging whether someone is the right fit for your business culture can be tricky, and it’s important not to let unconscious bias get in the way. But cultural alignment means that candidate retention will be much higher, saving a lot of time and money by ensuring you don’t have to repeat the hiring process a few months down the line.

Ready to Help

At Recruitment Accountants, our team of experts are on hand to ensure that you not only remain compliant with all financial legislation, but that you can also be as financially efficient as possible. We only work with recruitment businesses, which means we’re experts in the industry and your best choice for an accountancy firm that will make a difference to your agency’s finances.

Get in touch to find out more about how we can help grow your business.

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