The rising cost of recruiting should be an important consideration for any business that’s on the market for talent, as it draws our attention to the problem of employee turnover and the benefits of retention over replacement.
Most recruitment and HR hiring teams will agree that candidate application rates are continuing to run high, however, they might have also noticed the rising cost of recruiting. Studying recruiting cost trends and the general state of recruitment with a keen eye, a new Appcast report just offered to put the full recruitment funnel into perspective for employers and hiring teams.
Relying on an advanced data set to draw its conclusions, the report found that cost-per-application (CPA) and cost-per-hire (CPH) rose sharply in 2025 despite a softer labor market, attributing this to “shifts in job board pricing and programmatic media models.” This presents us with an interesting conundrum: it has never been easier to find candidates interested in taking up a role, but it has also rarely been as expensive to actually hire a new employee.
THE RECRUITMENT PARADOX: MORE APPLICANTS, FEWER HIRES, AND THE RISING COST OF RECRUITMENT
The Appcast 2026 Recruitment Marketing Benchmark Report, which was released last week, offered us some interesting insights into the state of hiring today. For HR leaders attempting to navigate a “low-hire, low-fire” market, it is indeed a critical resource. The volume of applications is continuing to grow at an impressive pace, with more and more workers being pushed back into the job market to seek their next source of employment.
This means that employers can benefit from a more diverse selection of candidates and luxuriate in the ability to pick those who are right for their business. However, the cost of converting these applications into hired workers is also on the rise.
THE SPIKE IN COST PER HIRE IN 2025 IS A REMINDER THAT MORE VOLUME DOESN’T ALWAYS MEAN BETTER RESULTS
The Appcast report indicated that candidate application rates are trending on the higher side, which means that despite the trend of job hugging, there are many who are still on the lookout for employment. This is made easier by new resume generators and platform features that simplify the process of applying to a role. Despite this, job seekers are no more likely to find work.
If you’ve spent any amount of time job hunting on LinkedIn, the “Easy Apply” feature may have appeared like a gift from the heavens, intended to simplify the process of applying for a job quickly and efficiently. While this allows a greater number of job seekers to send in their applications, it also means that most candidates never hear back about the role.
On the HR side of things, this means more work in terms of assessing the candidates and finding someone who is the right fit for the organization, increasing the time it takes to successfully hire a candidate. Some turn to technological solutions to simplify the process, but these don’t come cheap either, adding to the cost per application and cost per hire.
THE LOW-HIRE, LOW-FIRE MARKET DOESN’T MAKE THINGS ANY EASIER
Despite the apparent trend of layoffs, most organizations aren’t explicitly out to fire and replace employees. Workers are clinging to their roles until they secure another opportunity, and businesses continue to maintain a stable workforce without making any dramatic changes until downsizing and cost-cutting become necessary. This creates a bottleneck in opportunities, opening up only a few roles that job seekers are required to compete for.
Employers also compete to pull the best of the available talent towards their organization, draining their resources not only to find the best application but also retain their attention with the most competitive offer. Ultimately, the rising cost of recruiting only benefits a few, leaving the rest of the flock of employers and employees both at a disadvantage.
THESE RECRUITMENT MARKET TRENDS EMPHASIZE THE IMPORTANCE OF RETENTION
An empty seat can mean lost revenue for a business that operates on tight margins, however, a rushed recruitment process can sometimes be more expensive in the long run. Balancing the rising cost of recruiting with results that make the investment worthwhile isn’t simple, but it is necessary. The first order of business is to explore the necessity of hiring and consider whether investments in retention may be a better idea.
Organizations appear keen on hiring top talent, but upgrading their existing workforce and furnishing them with new skills can be a more economical strategy. Reallocating some of the recruitment budget towards internal mobility could solve many of the issues of a disjointed internal hierarchy, allowing the talent to circulate and grow within the organization.
THE NEED FOR STRATEGIC CHANGE TO HIRING SYSTEMS IS ALSO EVIDENT
The low-hire, low-fire market makes planned investments into employee engagement and retention an obvious solution, but it is impossible to abandon all hiring plans entirely. This means that existing hiring systems require an upgrade, but not one that is overly wrought with complex tools and advertising on an excessive number of platforms. With costs rising every day, streamlining the hiring and interview process without an over-reliance on technology is still essential.
Technological solutions have many benefits to offer, but investing in multiple tools that overlap in function only increases the recruitment costs. Instead of attempting to recruit from every platform and service imaginable, it is better to start tailoring job descriptions and recruitment criteria with greater care. Shifting away from prioritizing volume in exchange for value could be the start to a more comprehensive hiring system.
With the rising cost of recruiting workers, the era of “post and pray” hiring is officially over. Successful recruitment requires rigorous planning to set up a system that isn’t just about filling a seat but doing so with precision, speed, and fiscal responsibility.
Do you think the rising cost of recruiting workers is going to further hurt hiring numbers, or is this just a temporary problem? Share your thoughts with us in the comments. Subscribe to The HR Digest for more insights on workplace trends, layoffs, and what to expect with the advent of AI.
Source – https://www.thehrdigest.com/efficiency-over-volume-how-to-offset-the-rising-cost-of-recruiting/