The Cost of "Just Hire More People" vs. AI Agents

The "Just Hire" Response 

When exception volume exceeds capacity, default response is hiring. Understanding true hiring trajectory versus AI alternative over 5 years reveals full cost picture. 

The Hiring Trajectory 

Year 1: Hire 1 FTE = $109,000  

Year 2: Same FTE = $109,000 Year 3: Volume up 45%, hire 0.5 FTE = $164,000  

Year 4: Continue = $164,000  

Year 5: Volume up 100% total, hire 2nd FTE = $218,000 

5-year total: $764,000 

Plus: Recruiting costs, onboarding time, management overhead, turnover risk 

The AI Alternative 

Year 1: Implementation = $35,000  

Year 2: Ongoing = $8,000  

Year 3: Ongoing = $8,000  

Year 4: Ongoing = $8,000  

Year 5: Ongoing = $8,000 

5-year total: $67,000 

Five-Year Comparison 

Hiring: $764,000  

AI: $67,000  

Savings: $697,000 

What Hiring Adds 

Recruiting: $5,000-$15,000 per hire  

Onboarding: 3-6 months to full productivity  

Management: 5-10 hours monthly supervision per person  

Turnover risk: 15-25% annually, restart cycle 

What AI Provides 

Scales with volume without proportional cost increase  

No turnover or knowledge loss  

Consistent quality regardless of volume  

Complete documentation automatically 

When Hiring Still Makes Sense 

• Volume exceeds 300 exceptions monthly 

• Strategic team building goal 

• Complex judgment required beyond AI capability 

• Budget supports ongoing commitment 

The Reality 

"Just hire more people" creates recurring cost cycle. Volume grows 20-25% annually, requiring additional staff every 2-3 years. 

Five-year hiring trajectory: $109K to $218K annually. AI alternative: $35K Year 1, $8K ongoing. Savings: $642K-$697K over 5 years. 

AI scales with growth. Hiring creates compounding cost. 

About the Author: This content is published by ERP AI Agent. 

Published: January 2025 | Reading Time: 3 minutes