A company plans to recruit 150 new employees with a recruitment budget of Rs. 2,500,000. It intends 70% of hires to be internal and 30% external. The cost per internal hire is Rs. 25,000 and per external hire Rs. 35,000. Calculate the total recruitment cost, and determine how many internal and external hires can be made within the budget. Explain how this cost structure influences staffing strategy.

Step-by-step solution

1. Let x = number of internal hires, y = number of external hires, with x + y = 150.
2. Cost equation: 25,000x + 35,000y = Total Cost.
3. Since the company wants 70% internal, set x = 0.70 × 150 = 105 and y = 45.
4. Compute cost: 25,000 × 105 + 35,000 × 45 = 2,625,000 + 1,575,000 = 4,200,000.
5. Budget is 2,500,000, so planned split is unaffordable.
6. Find maximum hires within budget assuming 70% internal: let n = total hires, cost = 0.70n × 25,000 + 0.30n × 35,000 = 28,000n.
7. Solve 28,000n ≤ 2,500,000 → n ≤ 89.29 → maximum 89 hires.
8. Allocate: internal = 0.70 × 89 ≈ 62 (rounded), external = 27.
9. Total cost = 28,000 × 89 = 2,488,000 ≈ 2,480,000 due to rounding.
10. Explain influence: higher external cost limits external hires, so companies may favour internal recruitment to stay within budget.

Concept tested: Recruitment cost budgeting

Published 13 October 2026 · How this solution was prepared and checked