Hiring a new employee can cost a company £5,000, according to new research.
A study by recruitment consultants Angela Mortimer has found that a combination of both hard and soft costs - for example advertisement fees and management time - create the expenditure.
The firm used its Cost of Recruitment Calculator to work out the figure. The calculator was developed to help companies recruit efficiently and cost-effectively, by allowing them to monitor the cost of hiring individual members of staff.
Richard Farmer, HR director for Angela Mortimer, commented: "It was useful to establish how much we actually spend on recruitment.
"This helped us to identify areas where we could improve our efficiency and streamline our recruitment processes to reduce the time to fill a vacancy."
Cass Business School, part of London's City University, was found to be spending more than £175,000 a year on recruitment following an assessment by Angela Mortimer using the Cost of Recruitment Calculator.