Hiring a new employee is more than just paying a salary. Before a new employee joins the company, there are usually many other costs involved, such as job advertising, candidate screening, interviews, recruitment agency fees, and the time spent by HR and hiring managers.
For companies in Thailand, understanding these recruitment costs can help with workforce planning and make the hiring process easier to manage.
But how much does it really cost to hire an employee in Thailand? The answer depends on the position, the level of the candidate, how difficult it is to find the right person, and how the company manages its recruitment process.
What Is the Cost of Hiring an Employee?
The cost of hiring an employee is the total amount a company spends to find, assess, select, and hire a new employee.
The salary of the new employee is usually the biggest cost after hiring. However, it is not normally included when companies calculate the cost per hire.
Recruitment costs are the expenses that happen during the hiring process, from finding candidates to accepting an offer.
For example, a company may spend money on job advertisements, recruitment platforms, assessment tools, or recruitment agencies. At the same time, HR teams and managers also spend working hours on reviewing resumes, conducting interviews, and making hiring decisions.
This means that even when a company does not pay an outside recruitment agency, hiring still has a cost.
What Costs Are Included in Recruitment?
Recruitment costs can be different from one company to another. Some common costs include:
Internal Recruitment Costs
HR teams spend time working on job descriptions, searching for candidates, reviewing resumes, contacting applicants, arranging interviews, and preparing job offers.
Hiring managers also spend time interviewing candidates and discussing who should move forward.
Although these costs may not appear as a separate bill, employee time is still part of the overall recruitment cost.
Job Advertising
Companies may need to advertise their vacancies on job websites, social media, or other recruitment platforms.
The cost can depend on the platform, the type of job advertisement, and how long the position needs to be promoted.
For positions that are difficult to fill, companies may also need to advertise on several platforms to reach more candidates.
Recruitment Agency Fees
Some companies work with recruitment agencies or headhunters, especially when they need candidates with specific skills, experience, or language abilities.
Recruitment agency fees can vary depending on the agency, position, seniority, and recruitment service. Some agencies charge a percentage of the candidate’s annual salary, while other arrangements may use different fee structures.
Because of this, companies should check the agency’s terms and conditions before starting the recruitment process.
Assessment and Screening
Some positions require more than a resume review.
Companies may use language tests, technical tests, personality assessments, or other screening methods to check whether a candidate is suitable for the role.
These assessments may have direct costs. They can also add time to the recruitment process.
Interview and Hiring Time
Interviews take time for both candidates and company employees.
For example, a hiring manager may need to spend one or two hours interviewing a candidate. If there are several interview rounds, the total time can become much higher.
HR teams also spend time arranging interviews, communicating with candidates, preparing documents, and following up after each interview.
How to Calculate Cost per Hire
One simple way to understand recruitment spending is to calculate cost per hire.
A basic formula is:
Cost per Hire = Total Recruitment Costs ÷ Number of Hires
For example, if a company spends THB 100,000 on recruitment during a period and hires 10 employees, the average cost per hire is:
THB 100,000 ÷ 10 = THB 10,000 per hire
The total recruitment cost can include job advertising, recruitment agency fees, assessment costs, and other hiring expenses.
Companies can also include the estimated cost of HR and hiring managers’ time if they want a more complete picture.
It is important to remember that Cost per Hire is an average. The cost of hiring one employee can be very different from another, especially when comparing entry-level positions with senior or specialized roles.
How Much Does a Recruitment Agency Cost in Thailand?
There is no single standard price for recruitment agencies in Thailand.
The fee usually depends on factors such as the type of position, candidate level, recruitment difficulty, and service provided by the agency.
For example, hiring for a general administrative position may require a different recruitment process from hiring an experienced engineer, manager, or Japanese-speaking professional.
Some recruitment agencies charge a fee based on the successful candidate’s annual salary. Others may offer different service models depending on the company’s hiring needs.
Companies should therefore look at more than just the percentage or fee. It is also useful to understand what is included in the service, such as candidate sourcing, resume screening, interview coordination, replacement policies, and communication with candidates.
For companies hiring several positions or looking for candidates with specific skills, discussing the recruitment process and fee structure with the agency in advance can help avoid unexpected costs.
What Makes Hiring More Expensive?
Not every position costs the same to fill. Several factors can make recruitment more expensive.
Seniority
Senior and management positions often take more time to fill because companies usually look for candidates with more experience and a wider range of skills.
The interview process may also involve more decision-makers and more interview rounds.
Specialized Skills
Some positions require technical skills, industry knowledge, or specific qualifications.
The more specific the requirements are, the smaller the potential candidate pool may be.
For example, finding a candidate who has both technical experience and Japanese or English language skills can take more time than hiring for a position with more general requirements.
Time to Fill
The longer a position remains open, the more resources a company may spend on recruitment.
HR teams need to continue sourcing and contacting candidates. Hiring managers may also need to spend more time reviewing applications and conducting interviews.
There can also be a business cost when a position stays vacant for a long time, especially if the role is important to daily operations.
Candidate Shortage
When there are fewer suitable candidates in the market, companies may need to spend more time and money to find the right person.
They may need to use more recruitment channels, contact passive candidates, or work with a recruitment agency.
Multiple Interview Rounds
Having several interview rounds can help a company make a careful hiring decision. However, it also increases the time spent by HR, managers, and candidates.
A long process can also make candidates lose interest if they have other job opportunities.
How Companies Can Manage Recruitment Costs
Managing recruitment costs does not always mean spending less money.
The first step is to understand where the money and time are being spent.
Companies can start by tracking the cost of each hiring channel. For example, they can compare how many suitable candidates come from job websites, social media, employee referrals, and recruitment agencies.
It is also useful to look at Time to Fill and Quality of Hire, not only the number of applicants.
A low-cost recruitment channel may bring many applications, but if most candidates are not suitable, HR may spend more time screening them.
Companies can also improve the hiring process by writing clear job descriptions and defining the key requirements before starting recruitment. This can help reduce applications from candidates who do not match the position.
For difficult or specialized roles, working with a recruitment agency may also help reduce the time spent searching and screening candidates internally.
Is a Lower Recruitment Cost Always Better?
Not necessarily.
A low recruitment cost can look attractive, but it does not always mean that the hiring process is effective.
For example, a company may spend very little money on advertising but receive only a small number of suitable candidates. The position may then remain open for several months.
On the other hand, a company may spend more on recruitment support but find a suitable employee faster.
The right way to look at recruitment costs is not only “How much did we spend?” but also “What did we get from that spending?”
Companies should consider several factors together, including Cost per Hire, Time to Fill, quality of candidates, and how well the new employee fits the position.
In the end, recruitment is an investment in people. The goal is not simply to find the cheapest way to hire someone, but to find a suitable employee through a process that is efficient for both the company and the candidate.
By understanding where recruitment costs come from, companies can make better decisions about which hiring methods and recruitment channels are right for their needs.
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Personnel Consultant , We’re Japanese recruitment company in Bangkok. We has been in the business of recruiting Thai and Japanese talent for 30 years.
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Email : jobs@personnelconsultant.co.th
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