When it comes to B2B lead generation, businesses face a crucial decision: should you hire an in-house Sales Development Representative (SDR) or partner with a specialised agency? This choice has a major impact on your budget, resources, and ultimately, the performance of your sales pipeline. Let’s break down the true costs and benefits of each approach.
The Real Cost of Hiring an SDR
According to Glassdoor, the average SDR salary in the UK ranges from £25,000 to £35,000 annually, with experienced professionals commanding up to £45,000. However, the base salary is just the start. Once you add National Insurance contributions at 13.8%, minimum pension contributions at 3%, holiday pay, sick leave coverage, and potential bonuses or commissions, the total employment cost for a mid-level SDR typically sits between £35,000 and £55,000 per year.
Recruiting the right SDR also comes with hidden costs. Job board listings usually range from £200 to £500 per posting, recruitment agencies charge 15–25% of the annual salary, and there are further expenses tied to interview time, background checks, and onboarding. The Society for Human Resource Management estimates the average cost-per-hire in the UK is around £3,000, but this can rise to £8,000 for sales roles.
Technology and tools add yet another layer of expense. An SDR requires access to a CRM system costing £50–£150 per user each month, a sales engagement platform costing £80–£200 per user, LinkedIn Sales Navigator at £60 per month, plus email automation tools at £30–£100 per month, alongside calling software, phone credits, and office equipment. These costs usually amount to £3,000–£6,000 per year.
Training is another critical expense. New SDRs often need three to six months to become fully productive, meaning you’re paying a full salary while seeing limited results. Research by Sales Hacker reveals that only 57% of sales reps hit their quota in their first year. Beyond the ramp-up period, companies also invest continuously in training, typically spending 3–5% of payroll annually, which translates into £1,000–£2,500 per SDR.
The Cost of Partnering with an Agency
By contrast, outsourcing to a lead generation agency typically costs between £2,000 and £8,000 per month, depending on scope and volume. This usually covers dedicated account management, multi-channel outreach across email, LinkedIn, and cold calling, access to advanced prospecting technology, delivery of qualified leads, and detailed reporting with performance analytics.
When you choose an agency, you also gain access to an entire team of specialists rather than one individual, proven processes built from experience across multiple industries, an advanced technology stack without separate licensing costs, GDPR-compliant data handling, website visitor identification, and a fully integrated multi-channel approach.
Comparing Performance and Results
A single SDR can typically reach 50–100 prospects per day, but capacity is limited by their experience, their learning curve within your industry, and potential downtime due to sick leave, holidays, or even resignation. By contrast, an agency leverages a team approach, ensuring consistent coverage, immediate expertise, and the ability to scale activity up or down as needed. According to Salesforce, companies that outsource their sales development achieve 43% higher growth rates compared to those relying only on internal teams.
Total Cost of Ownership
In the first year, hiring an SDR typically costs around £54,000. This includes £40,000 for salary and benefits, £5,000 for recruitment, £4,000 for technology, £2,000 for training, and £3,000 for office space and utilities. Importantly, this assumes the SDR becomes productive immediately, which rarely happens in reality.
On the other hand, a year-long partnership with an agency averages around £48,000, based on a monthly fee of about £4,000. Unlike hiring, this doesn’t come with added recruitment, technology, or training costs, and agencies usually start producing results immediately.
Making the Right Choice
Hiring an SDR internally makes the most sense if you have strong sales processes already in place, require deep product knowledge that’s difficult to outsource, plan on long-term investment in sales development, and have the budget to support extended ramp-up periods.
Partnering with an agency is often the smarter choice when you need faster time-to-market, want predictable monthly costs without hidden expenses, lack internal expertise in sales development, require true multi-channel outreach capabilities, or value scalability and flexibility.
Conclusion
Whilst hiring an SDR might appear cost-effective on the surface, the true investment usually exceeds the cost of an agency once you include recruitment, training, technology, and the inevitable ramp-up time. By contrast, agencies like SendIQ provide immediate access to experienced teams, proven processes, and enterprise-grade technology that would cost far more to develop internally.
The choice ultimately depends on your circumstances, but for most growing B2B companies, partnering with an agency offers better value, faster results, and reduced risk in today’s competitive marketplace.
