Labor costs seem to be constantly growing, rising by 3.6% in the past year. Looking ahead, that makes them a major budget line item for employers and a key part of their staffing strategy.
But even the best-planned budgets can be stretched thin when staffing needs spike unexpectedly or shift with the seasons. To add to that, traditional hiring methods often add to the pressure, bringing slower timelines, higher overhead, and hidden costs that eat away at your resources.
For many companies, risks like these led them to turn to staffing partnerships. Working with a trusted agency like Spherion is a smart labor budget management strategy that can turn hiring from a costly chore into a smart investment. While some businesses assume staffing agencies cost more, the reality is that the right partner helps you save in the long run. We’ll show you how.
The true costs of traditional hiring
In a bid to keep costs down, businesses may prioritize hiring directly. This might seem like the cheaper option at first glance, but once you start adding up the real costs—both visible and hidden—the picture changes fast. From upfront expenses like job ads and background checks to the ripple effects of lost productivity or a bad hire, traditional hiring can quickly become a drain on your labor budget. This can be especially tricky for businesses with seasonal or project-based needs, where overhiring or under-preparing can throw off your financial footing. Here’s a closer look at the full cost of hiring independently.
Direct hiring expenses breakdown
The moment you post a job, the spending begins. Advertising on job boards, boosting posts, and managing listings can add up quickly. Then comes the HR labor, with hours spent screening resumes, scheduling interviews, and following up with candidates. Once you’ve made a hire, there are still costs tied to drug testing, background checks, and onboarding paperwork. Don’t forget training, either. It takes time for new hires to ramp up, and that lag impacts productivity.
Indirect costs employers often overlook
Beyond the obvious expenses are the less visible ones. Many companies invest in recruitment software or applicant tracking systems that carry ongoing costs. Hiring managers often pull away from their regular responsibilities to participate in the process, affecting workflow. Unfilled roles mean missed opportunities and increased pressure on your current team. And when a hire doesn’t work out, replacing them can cost a whopping 50%- 200% of their annual salary, depending on their experience level.
Seasonal and project-based hiring challenges
Finally, if your workforce needs to shift throughout the year, traditional hiring often leads to inefficiencies. Hiring too early or hiring too many people creates waste, while hiring too late leaves you short-handed. But maintaining an internal HR team that can accurately scale up and down with that kind of demand is tough—and expensive.
Four ways a staffing agency can reduce your total hiring investment
It might feel counter-intuitive, but partnering with a staffing agency like Spherion creates real, measurable savings across nearly every part of the hiring process. From recruiting to onboarding to long-term workforce management, Spherion helps employers cut unnecessary costs while improving results, ultimately supporting smarter labor budget management.
More streamlined recruitment process
Spherion takes care of the most time-consuming and resource-heavy parts of hiring. We source candidates, screen them, and present only the most qualified options, so employers spend less time sorting through resumes and more time building their teams. This faster, more focused process shortens the time-to-fill and limits the disruption of open roles.
More efficient training and onboarding
When you hire through Spherion, you bring on employees who are fully vetted and prepared to work. Candidates are selected based on relevant experience, required certifications, and job readiness, which cuts down on training time and cost. Plus, our deep understanding of industry-specific needs means we deliver people who already speak your language, whether that’s in logistics, manufacturing, customer service, or beyond.
Substantial administrative cost savings
Spherion takes over many of the behind-the-scenes responsibilities that come with hiring, things like payroll, benefits, tax reporting, and workers' compensation and unemployment claims. Our team also ensures compliance with labor laws, reducing your risk and freeing up internal resources.
Technology and infrastructure savings
You don’t have to invest in your own expensive HR tech when you work with us. Instead, we provide access to our applicant tracking systems and recruiting platforms, saving you the time spent finding the right tech, as well as the cost of software licenses, upgrades, and IT maintenance.
Staffing partners bring flexible staffing solutions that scale with your budget
One of the best ways to keep hiring costs under control is to match your workforce to your actual workload, something that staffing agencies are especially skilled at doing. Flexible staffing solutions enable you to plan for seasonal shifts, launch a new initiative, or deal with unexpected absences with ease—and a staffing agency can help you adapt quickly without inflating your budget. With the right approach, you can respond to changing conditions while keeping labor budget management front and center.
Temp-to-hire staffing strategies
Bringing someone on full-time is a big investment, and it doesn’t always work out. A retail company looking to expand its in-store team, for example, might engage a staffing agency to assist with temp-to-perm hiring to reduce the risk of a bad fit. This “try before you buy” approach allows businesses to evaluate a candidate’s performance and cultural fit on the job before making a long-term commitment.
Project-based staffing solutions
When deadlines are tight and a project has a clear end date, full-time hiring usually isn’t the best move. A tech company may have big QA needs ahead of a new product rollout, and reaching out to a staffing agency for help with project-based staffing lets them bring in experienced testers just for the duration of the project, without tying up budget on long-term salaries or benefits. Once the project wraps, so do the staffing costs.
Seasonal workforce management
Businesses with predictable busy seasons—like fulfillment centers during the holidays or hospitality venues in the summer—can use seasonal staffing to scale up without carrying extra costs all year long. For example, a warehouse might need to double its workforce for eight weeks in December. With a staffing partner, they can quickly bring in workers who already have relevant experience, saving time on training and staying within their seasonal budget.
On-demand staffing for unexpected needs
Sometimes, staffing gaps happen with no warning. A manufacturing company might have several employees call out during a production run, or a customer service center might face a sudden volume spike. Staffing agencies have established pools of qualified talent to supply for on-demand staffing, making it possible to bring in people quickly, keep operations running, and avoid the high costs of overtime or delays.
Right-sizing your workforce
Maintaining the right number of people on staff is a constant balancing act. For instance, a logistics company may need extra drivers during high-volume shipping weeks but fewer during slower periods. Flexible staffing allows them to adjust headcount up or down as needed, keeping costs aligned with demand. With workforce planning support from a staffing agency, they can avoid both understaffing and overstaffing, protecting their productivity and their budget.
Find more cost-effective staffing solutions through Spherion
A staffing partnership with Spherion helps you fill roles while making smarter, more informed workforce decisions that stretch your budget further. From data-backed salary insights to customized pricing and long-term planning support, Spherion brings value at every stage of the hiring process. We also help reduce financial risk. If a placement doesn’t work out, we’ll replace them—no extra cost.
And with access to Spherion’s salary guides—including updated versions coming in August 2025—you can make offers that are both competitive and fit with your budget-friendly hiring strategy. We provide market-rate data tailored to your industry and region, helping you plan your labor budget with confidence and avoid overpaying for talent.
Our transparent pricing means no surprises, and with predictable monthly billing options, you can stay in control of your staffing expenses. Plus, when you build an ongoing relationship with us, you’ll benefit from volume-based pricing models that reduce your per-hire costs. Our preferred clients enjoy priority service, faster fill times, and pricing options that flex with your needs.
Beyond filling roles, Spherion supports your long-term planning. Whether you're preparing for seasonal surges or building a multi-year workforce strategy, we’ll help you stay ahead with insights into industry trends, wage shifts, and staffing forecasts tailored to your goals.
Smarter staffing starts here
Labor budget management doesn’t have to mean sacrificing quality or flexibility. With Spherion, you get cost-effective staffing solutions that give you more control, less risk, and stronger hiring ROI.
Ready to see where your staffing dollars are going and how they could work harder for you? Schedule a consultation to analyze your current costs and explore flexible, scalable solutions. In this fast-moving market, a smart staffing partnership can help you stay competitive by working with the right team, right when you need them.