The cost of hiring an employee at a startup is one of those numbers that looks manageable on paper and turns out to be staggering in practice. Most founders budget for salary and maybe a recruiter fee. The real cost includes everything else they forgot to count.
For growth-stage companies between 10 and 250 employees, the total cost of a single hire typically lands between $15,000 and $50,000 when you account for every input. That range is wide because it depends on the role, your process, and whether things go right on the first attempt. Here is where the money actually goes.
Direct recruiting costs
These are the line items most founders think about first. Job board postings run between $200 and $500 per listing on platforms like LinkedIn, Indeed, or AngelList. If you use a recruiting agency, expect to pay 15 to 25 percent of the hire's first-year salary. For a $120,000 role, that is $18,000 to $30,000 in agency fees alone.
If you use recruiting software or an ATS, add $200 to $500 per month. Background checks, skills assessments, and other screening tools add another $100 to $500 per candidate who makes it to the final round.
For most startups making their first few hires, direct recruiting costs alone total $3,000 to $30,000 per position, depending on whether you use an agency or handle sourcing internally.
The cost of your time
This is the expense that rarely shows up on a spreadsheet but almost always dominates the total. When a founder runs the hiring process, they spend 15 to 25 hours per week on recruiting activities: writing job descriptions, screening resumes, scheduling interviews, conducting interviews, checking references, and negotiating offers.
At a conservative $200 per hour valuation of founder time, that is $3,000 to $5,000 per week. If a role takes six weeks to fill, the founder has spent $18,000 to $30,000 in opportunity cost on a single hire. That is time not spent on product, customers, fundraising, or leading the existing team.
And it compounds. Every week a founder spends on recruiting is a week the product roadmap slips, sales cycles stall, and the existing team absorbs more work than they should.
Interview and evaluation costs
Every person who interviews a candidate has their own opportunity cost. A typical startup interview loop involves four to six people across two to three rounds. If each interview is 45 minutes, plus 15 minutes of prep and debrief, that is four to six hours of team time per candidate who reaches the final round.
Most roles require evaluating three to five finalists to make one hire. That adds up to 12 to 30 hours of team time per successful hire, not counting the dozens of initial screens that lead to those finalists.
Onboarding and ramp-up costs
The cost does not stop at the signed offer letter. New employees need equipment ($1,500 to $3,000 for a laptop and peripherals), software licenses ($100 to $500 per month), and onboarding time from their manager and teammates.
The ramp period matters too. Most new hires take 30 to 90 days to reach full productivity, depending on the role. During that window, the company is paying full salary for partial output while also consuming senior team members' time for training and mentorship.
The cost of getting it wrong
A mis-hire multiplies every cost listed above. Industry research consistently estimates the cost of a bad hire at 1.5 to 3 times the employee's annual salary. For a $120,000 role, that is $180,000 to $360,000 when you factor in recruiting costs (incurred twice), onboarding (incurred twice), lost productivity during the failed tenure, the impact on team morale, and management time spent on performance issues.
At a 30-person startup, one bad hire does not just affect a budget line. It affects the entire team's velocity and confidence. And the replacement cycle starts from zero, often more expensive than the first attempt because you are now hiring under even more time pressure.
Putting it all together
| Cost Category | DIY (Founder-Led) | Agency | Embedded Recruiting |
|---|---|---|---|
| Job postings and tools | $500 to $1,500 | Included in fee | Included in fee |
| Recruiter/agency fee | $0 | $18,000 to $30,000 | Flat monthly rate |
| Founder time (6 weeks) | $18,000 to $30,000 | $3,000 to $5,000 | $2,000 to $3,000 |
| Team interview time | $3,000 to $5,000 | $3,000 to $5,000 | $3,000 to $5,000 |
| Onboarding and ramp | $5,000 to $10,000 | $5,000 to $10,000 | $5,000 to $10,000 |
| Total per hire | $26,500 to $46,500 | $29,000 to $50,000 | Significantly lower |
The biggest variable is the cost model for the recruiting function itself. DIY costs you in time. Agencies cost you in fees. Embedded recruiting spreads a flat monthly cost across every role you fill, which means the cost per hire drops with each additional placement.
What this means for your hiring decisions
Understanding the true cost of hiring changes how you evaluate your options. A $20,000 agency fee looks expensive in isolation, but it might be cheaper than six weeks of founder time. A monthly embedded recruiting fee looks like an overhead expense until you realize it covers five hires at a fraction of the per-placement cost.
The most expensive approach is almost always the one that looks cheapest: doing it yourself. Not because founders lack the ability, but because their time is the most valuable and least replaceable resource in the company. Every hour a founder spends on recruiting is an hour the company loses on everything else. And at growth stage, those hours matter more than they ever will again.
The goal is not to minimize the dollar amount you spend on hiring. It is to maximize the return on every dollar and every hour that goes into building your team.