Direct-Hire ROI: Agency Fees vs a Software Subscription

The ROI of direct hiring is the agency markup you stop paying minus the cost of the software you use to source in-house, and for any contractor hiring at volume that difference is usually large and fast to realise.

Step 1: total your agency spend

Add up markups and placement fees over the last year. Include the roles you fill repeatedly through agencies, which are the biggest savings opportunity.

Step 2: cost the alternative

A flat sourcing subscription, like the one EasySource publishes, plus some recruiter time to run it. This cost does not scale with hires the way agency fees do.

Step 3: compare and phase

Subtract software cost from agency savings. Then phase the transition, insourcing easy roles first, so you capture savings while protecting fill rates.

Beyond the spreadsheet

Direct hiring also builds an owned pipeline and a lasting capability. Agency spend buys a placement; software spend builds an asset.

A real-world example

A contractor modelled a year of agency fees against a flat software subscription and projected that insourcing even half its routine hiring would return several times the software cost within the first year.

Frequently asked questions

How do you calculate direct-hire ROI versus an agency?

Subtract the cost of sourcing software from the agency markup you stop paying. At volume the difference is usually large.

Does software cost scale with hires like agency fees?

No. A flat sourcing subscription does not rise with each hire the way agency markups do, which is the core of the savings.

What is the non-financial benefit of direct hiring?

It builds an owned pipeline and a lasting capability, whereas agency spend buys a single placement.

Related reading

Read the agency cost comparison and in-house pipeline guide.