Why agency cost optimisation matters

In managing agencies, you accept a trade-off: external expertise, scalability, and access to talent — at a premium price. Over time, “agency spend” often drifts upward including:

• Undefined deliverables, or overlapping work

• Legacy retainer models that no longer reflect incremental value

• Inefficiencies

• Poor oversight or weak KPIs

• Failure to renegotiate contracts or revisit terms

That “drift” is where 20–30% (or more) of your budget leaks out. But cutting blindly is dangerous because you risk losing quality, morale, or relationships. 

This playbook gives you a principled, structured approach to reclaiming budget while preserving (or even improving) outcomes.

1. Diagnose before you cut

Before any reduction, you need to understand exactly where your money goes.

Map your spend. Break down agency costs into core retainers, project fees, pass-through expenses, subcontractors, and bonuses. Most hidden overspend lives in unclear or blended categories.

Benchmark rates. Compare your effective hourly or project rates against industry standards or peer organisations. External reports, procurement databases, or partner audits can help you spot inflated costs.

Measure value vs. cost. For each agency, identify how much output or value you get per euro spent. Are you paying premium rates for routine execution work?

Find quick wins. Look for duplicate work across agencies, unneeded services, or deliverables that can be automated or brought in-house.

2. Strategic levers to unlock 20–30% savings

Savings shouldn’t come from squeezing partners unfairly. They come from smarter design.

Refocus the scope

Audit what truly adds value. Remove or reduce low-impact deliverables. Avoid scope creep and streamline roles across agencies.

Right-size resourcing

Adopt hybrid staffing. Let agencies focus on strategy and creative value, while repetitive execution or reporting shifts to in-house teams or specialised freelancers.

Use technology and automation

Adopt AI-powered tools for screening, reporting, and scheduling. Automate repetitive agency tasks and integrate shared dashboards to improve transparency and cut manual hours.

Consolidate and strategically source

Fewer, more strategic partners lead to stronger relationships and better pricing. Consolidate agency spend under a clear Preferred Supplier List and negotiate volume discounts.

Redesign fee structures

Move away from outdated retainers. Use models that align incentives: fixed-fee per deliverable, tiered retainers, or performance-based pricing tied to measurable outcomes.

Renegotiate smarter

Set review points in contracts every 12–24 months. Revisit terms based on market benchmarks, performance data, and evolving business needs. Ensure all pass-through costs and subcontractors are transparent.

Adopt a zero-based mindset

Rebuild every budget from scratch each cycle. Require justification for every euro—nothing carries over automatically.

Build cost awareness

Empower HR, procurement, and hiring teams with clear dashboards, spend visibility, and shared accountability. Small behavioural shifts in spending and oversight lead to long-term efficiency.

3. Implementation roadmap

Cost reduction is a change process. Here’s how to roll it out effectively:

Phase 1: Align internally. Bring HR, procurement, and finance together. Set a clear savings target and assign ownership.

Phase 2: Pilot change. Test new fee structures or renegotiations with one or two agencies. Track outcomes, collect feedback, refine your model.

Phase 3: Scale strategically. Extend successful models across all agencies. Consolidate spend and implement shared dashboards for visibility.

Phase 4: Sustain governance. Establish quarterly reviews, performance dashboards, and automatic reset clauses in contracts. Keep a continuous improvement mindset.

4. Guardrails to keep everything in check

To ensure savings last:

• Track spend and savings in real time through integrated dashboards

• Audit all pass-through and subcontractor costs

• Conduct quarterly variance reviews against baselines

• Enforce contract compliance and change-control procedures

• Embed cost awareness in KPIs for hiring and procurement teams

Remember, effective governance turns one-time savings into lasting discipline.

5. Turn cost discipline into daily efficiency with HirePort

The strategies in this playbook become far easier—and faster—with the right platform.

HirePort connects your agencies directly inside your ATS, giving you:

• Full cost visibility: See all agency spend, performance, and contract data in one central place.
  
  

• Faster collaboration: Replace scattered emails and phone calls with one shared workspace.
  
  

• Automated controls: Manage contracts, compliance, and supplier terms directly within your ATS.
  
  

• Performance insights: Compare agencies on results and efficiency, helping you allocate budget where it truly matters.
  
  

Companies using HirePort typically reclaim 15–30% of the time and spend lost to fragmented agency management— while improving hiring speed and candidate quality.

Agency cost optimisation doesn’t start or end with spreadsheets. It starts with visibility—and ends with control.

HirePort brings both, right where your recruitment happens.