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New recruiter ROI calculator.Know when a hire pays back.
Enter what a new recruiter costs and how quickly they ramp up. See their running profit or loss month by month, when they pay for themselves, and how much you have at risk until they do.
The hire
Agency fee, ads, laptop, training
Payroll taxes, pension, benefits
Office, software, data, job boards
Their ramp-up
Billings rise evenly until then
Commission
The hire has paid for itself by the end of month 12. Until then, up to $36,542 is at risk if they leave.
| Billings in the first year | $105,000 |
|---|---|
| Profit or loss after 12 months | $8,593 |
| After 24 months | $156,729 |
| Most you’d have at risk | $36,542 |
| First month in profit | Month 6 |
How the payback is worked out.
The calculator builds a month-by-month profit and loss for the new hire.
- Billings are zero until the month of their first fee, then rise in equal steps to full billings by the month you set, and stay there.
- Commission is the rate you enter on each month’s billings above the monthly threshold.
- Costs each month are a twelfth of base salary plus commission, plus employer costs on that pay, plus a twelfth of the desk overhead. The one-off hiring cost falls in month one.
Payback is the first month the running total reaches zero. At risk is the lowest the running total goes. Everything is on billings rather than cash received, so allow for your clients’ payment terms on top.
How long does it take a new recruiter to pay for themselves?
It depends on the market, how experienced they are and how long your placements take to land. A recruiter who brings a network can bill in their first quarter; someone new to recruitment may take six months or more to make a first placement and a year or longer to reach full billings. Put your own ramp-up in the calculator and it shows the month the hire breaks even overall.
What does “at risk” mean?
It’s the lowest point of the running total: everything you’ve spent on the hire, less what they’ve billed, at the worst moment. If they left then, that’s what you’d have lost. It’s also the cash you need to have available to support the hire through their ramp-up.
Why is my first profitable month earlier than payback?
The first profitable month is when a single month’s billings first cover that month’s costs. Payback is later because the hire also has to earn back the losses from every month before that, plus the one-off hiring cost.
Does the calculator include cash timing?
No. It works on billings, not cash received. Clients usually pay 30 to 60 days after you invoice, so the cash low point comes later and goes deeper than the chart shows. Add a month or two to payback if you’re planning cash.
How should I set the overhead?
Include the share of costs each desk carries: rent, software and data, job boards, phones, and the management time spent onboarding and training. A new starter often needs more management time than an experienced recruiter, so err on the high side.
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