5 Ways to Reduce Hiring Costs in Healthcare

Posted on June 5, 2025

Hiring in healthcare is increasingly expensive, with costs averaging $9,000-$12,000 per hire for specialized roles like nurses and physicians, far exceeding the national average of $4,700 (Engagedly, 2025). High turnover, averaging 20% for registered nurses, adds to expenses, with replacement costs reaching up to $56,300 per nurse (DailyPay, 2025). Lumen Recruiting Group’s Pay-On-Placement (POP) model offers a cost-effective, risk-free solution, charging fees only after a candidate is retained for 30 days at 5-9% compared to 15-30% for traditional agencies (New Millennia, 2024). This blog explores five proven strategies to reduce healthcare hiring costs, supported by a hypothetical scenario to enhance cost-effectiveness and hiring efficiency.

1. Leverage Technology

Applicant Tracking Systems (ATS) and AI-driven tools reduce time-to-fill by 40%, saving $1,538 per hire for every seven days cut (Oleeo, 2025; Workable, 2025). Lumen’s AI-driven sourcing targets healthcare certifications efficiently, boosting hiring efficiency.

2. Implement Employee Referral Programs

Referred candidates are hired 10 days faster (29 vs. 39 days) with 15% higher retention rates (HRMorning, 2025). Incentives like $2,500 bonuses reduce advertising costs by 20%, supporting turnover reduction (Haiilo, 2025).

3. Partner with Cost-Effective Recruitment Agencies

Lumen’s POP model charges 5-9% after 30 days, saving 70% compared to 15-30% upfront fees. For a $70,000 nurse role, Lumen’s 6.4% fee ($4,467) beats $14,000, enhancing cost-effectiveness (Lumen Documents).

4. Focus on Retention

Competitive salaries, development, and flexible schedules cut turnover by 20%, saving $1.1 million annually for 100 nurses if reduced from 20% to 16% (SHRM, 2025; DailyPay, 2025), improving long-term success.

5. Utilize Social Media and Online Platforms

Social media reaches 73% of passive job seekers, boosting applications by 30% with low-cost postings, supporting scalability (Occupop, 2025).

Hypothetical Scenario

Imagine a rural hospital needing 15 ICU nurses in 60 days. A traditional agency might charge 20% of $70,000 ($14,000 per hire), totaling $210,000. Lumen’s 6.4% fee ($4,467 per hire) would cost $67,005, saving $142,995, with hires in 45 days (48% faster than 86 days) (Manatal, 2025).