Government agencies are spending up to five times more to recruit staff through private firms than they would using internal mechanisms, a new report by the Inspectorate of Government (IG) has revealed.
The report, titled ‘The Cost-Benefit Analysis of Outsourcing Private Recruitment Firms by Government Departments and Agencies,’ shows a growing shift from in-house recruitment and official service commissions to outsourced private recruiters, at a high cost to taxpayers.
According to the findings, outsourced recruitment accounted for 81 percent of total recruitment expenditure, with over Shs2b, to hire 1,028 employees, while internal recruitment processes cost Shs485m (19 percent) to recruit 413 employees over the same period. ‘The unit cost of hiring one person using the outsourcing recruitment approach was Shs9m, compared to Shs1.9m using internal recruitment,’ the report states.
It adds: ‘External recruitment of staff per year was found to be five times more expensive than internal recruitment.’
The study covered 20 government departments and agencies during the 2018/2019 to 2022/2023 financial years, with 10 institutions outsourcing recruitment services and seven relying on internal processes. Among the biggest spenders was the Uganda Bureau of Statistics (Ubos), which paid Shs606m to a private firm to recruit 171 staff. The Electoral Commission (EC) followed closely, spending Shs565m to recruit 247 staff, while the Electricity Regulatory Authority spent Shs347m to hire 40 employees.
Other agencies cited include the Uganda Wildlife Authority, which spent Shs280m to recruit 30 staff, the National Social Security Fund (NSSF), which spent Shs136m to hire 229 staff, the Uganda Development Corporation (Shs80m for 15 staff), and Uganda Electricity Generation Company Ltd, which spent Shs71m to recruit 296 employees.
The IGG said agencies often justified outsourcing recruitment on grounds such as handling large volumes of applicants within short deadlines, lack of specialised in-house skills for senior positions, minimising internal interference, and understaffing in human resource departments.
However, the report raises concerns over value for money, pointing out that recruitment agency fees alone consumed 62 percent (Shs1.3b) of total outsourcing costs.
Other expenses included advertising fees (Shs322m), sitting allowances (Shs260m), ICT costs (Shs105m), legal and miscellaneous costs (Shs49m), onboarding (Shs10m), risk management (Shs25m), and skills testing and assessment (Shs11m). ‘Use of external recruitment is significantly more expensive than internal recruitment, with agency fees consuming the largest share of total costs,’ the report states.
The IGG further observed that private recruitment firms tend to emphasise academic qualifications and years of experience, often overlooking critical public service competencies such as integrity checks, security background verification, and familiarity with government systems. To mitigate this, some agencies reportedly retain control of final interviews to influence the ultimate selection of candidates. The report also highlighted variations in unit hiring costs, with the Uganda Wildlife Authority recording the highest annual cost per hire at Shs9.3m, followed by the Electoral Commission at Shs8.9m.
The Uganda National Bureau of Standards (UNBS) recorded the lowest unit cost at Shs69,634, after recruiting 219 staff at a total cost of Shs11m. The IGG recommended fast-tracking amendments to the Public Service Act, 2008, to harmonise recruitment across government entities, automating recruitment processes, strengthening HR capacity within MDAs, and prioritising internal recruitment mechanisms as a more cost-effective alternative to outsourcing. Efforts to obtain comment from some of the affected agencies were unsuccessful by press time.
The Ubos spokesperson, Mr Didacus Okoth, said he would consult internally before responding, but had not done so by press time, while EC spokesperson Julius Mucunguzi declined to comment, saying he had not seen the ombudsman’s report.
Some of the government agencies that outsourced recruitment services
Agency 2018/19 2019/20 2020/21 2021/22 Total
Ubos Shs220m Shs124m Shs106m Shs73m Shs605m
EC Shs39m Shs191m Shs73m Shs172m Shs565m
UWA Shs56m Shs38m Shs42m Shs75m Shs280m
UEGCL Shs6m Shs8m Shs29m Shs8m Shs71m
NSSF – Shs35m Shs45m Shs45m Shs136m
ERA Shs84m Shs52m Shs30m Shs93m Shs347m
UDC Shs27m Shs10m Shs8m Shs12m Shs80m
Total Shs435m Shs461m Shs336m Shs481m Shs2b
Internal
Agency 2018/19 2019/20 2020/21 2021/22 Total
UVRI Shs100m Shs96m – Shs60m Shs323m
NMS Shs23m Shs37m Shs32m Shs7m Shs118m
UNBS Shs1.9m – Shs384,000 Shs4m Shs10.9m
UCC Shs3.3m Shs3.3m Shs3.3m Shs3.3m Shs16.4m
NFA Shs4.8m – Shs8m Shs1.8m Shs16.4m
TOTAL Shs133m Shs136m Shs43m Shs77m Shs485m