Is Recruiting a Cost Center or a Revenue Driver?

Advice from experts · 3/27/2024 · 1 min read

Is Recruiting a Cost Center or a Revenue Driver?


Recruiting is an essential yet often misunderstood function of organizations. For years, we’ve debated whether recruiting is merely a cost center eating up resources, or if it's neatly tied to revenue and profit generation. In this article, we'll dive into this age-old question and look at both sides of the argument.

Hiring, a Costly Circus

Picture this: a company decides it's time to hire a new marketing manager. The talent team kicks off the recruitment process, posting job ads, sourcing passive talent, screening resumes, scheduling interviews—all while the clock ticks and dollars fly out the window. The hiring manager spends hours reviewing and interviewing candidates, deprioritizing important work that directly impacts the organization's revenue. Cue the negotiations, the back-and-forth, the inevitable compromise. Before you know it, what started as a simple job opening turned into a costly circus act.

The Time Vortex

The interview process can become a black hole where time disappears faster than the blink of an eye. Hiring managers and recruiters spend hours vetting candidates, conducting interviews, and deliberating over the perfect fit. Meanwhile, deadlines loom, projects stall, and productivity tanks. It's a vicious cycle: the more time spent on hiring, the less time available for ramp-up and doing actual work. And in the fast-paced world of business, time is money. Literally.

The Recruiter Conundrum

Recruiters, the unsung heroes (or villains) of the hiring saga. While their intentions may be noble, recruiters often find themselves caught in a Catch-22 situation. On one hand, they're tasked with filling positions quickly and efficiently, looking to optimize their numbers on the dreaded "time-to-fill" metric. On the other hand, rushing the process can lead to costly mistakes. Hiring the wrong person by overlooking crucial skills, or ignoring red flags can severely damage the quality of the hire. It's a delicate balancing act, navigating the fine line between speed and quality.

The Revenue Connection

So isn't recruiting just a necessary evil, a drain on resources with little to no return on investment? Not so fast. In my years of experience, I've seen that recruiting can be a cost center if it’s not conceived as a strategic function of the organization. It can easily take 4 months to hire a marketing manager if recruiters aren’t calibrated, if hiring managers go on vacation without appointing a proxy, if the hiring bar isn’t standardized across the board, or if the demon “we loved Mary, but we’d like to see more people” is summoned often… to name only a few blockers. Then yes, recruiting is a cost center that cannibalizes your teams’ budget and energy. Those extra 3.5 months that it took the marketing department to decide on Mary could have been invested in ramping her up properly and having her contribute to revenue activities early on.

The Hidden ROI of Hiring

Think about it: in organizations where recruiting isn’t a side gig but an instrumental part of success, hiring teams (not only talent acquisition teams but every team that will ever hire someone) constantly iterate on recruiting processes and improve them to ensure the right collaborators are welcomed and onboarded fast and efficiently. Here recruiting is not a cost center at all, but rather an engine that helps welcome people who bring unique perspectives and valuable skills to the table that drive growth and profit.

Conclusion & Call To Action

In conclusion, recruiting can be a line item on the budget sheet if overseen. But it's a strategic imperative and a catalyst for organizational success if embraced as a revenue-generating function. Companies can unlock untapped potential, and fuel growth and profitability if they invest in talent - better known as the future of their business.

So how are your teams hiring? Are your recruiting-related tasks deemed as a burden and being postponed or overlooked? Are you ready to turn that cost center into a revenue driver?