True Cost of Hiring New Employees
The cost of hiring can sometimes be so high that it hinders businesses from employing new people even when they need to. There are so many things that could go wrong that most Employers dread the process.
Few people realise the cost goes far beyond just advertising costs. If you work out the combined costs of recruiting, on-boarding, training and administration it starts to become a very expensive endeavour.
The Cost of Recruiting
The cost of hiring an employee goes way beyond the advertising cost. Firstly you will require to write that Killer Ad, which is an art in itself, because it needs to be informative, powerful and stand out to the right audience. Then there are the advertising costs! Let’s face it, using only one platform will not be enough to reach your targeted candidates, you need to have a broad approach to reach your audience, including social media and other networks. Have you considered the wage-cost of the person who is recruiting for the position? A recruitment process will take anywhere between 20 to 60 hrs and even more depending on the complexity of the role and the availability of candidates at the time. There could also be other costs involved in this process such as reference checking, competency testing, criminal & medical checks and more.
The Cost of Onboarding
Another factor that is often overlooked by companies is the cost of workplace integration. New employees need to fit into the workplace culture. Simply providing a desk and a computer is not enough. You also need to provide them with physical space, tools and anything else that is required for the job. The general statistics say that 22% of staff turnover occurs in the first 45 days of employment, so this is a part that you really want get right.
The Cost of Training
Training is another huge cost that cannot be avoided. In a report from Training magazine, companies spend an average of over 32 hours per employee. A lot of times new employees are trained by senior employees, who need to leave their own tasks to achieve this. How much are you paying your employee per hour? And how much is your senior personnel’s time worth per hour? It really starts to add up now…
The Break-Even Point
Hopefully, by investing in your new employee you may be able to reap the benefits. After all, that’s why you invested in the first place. However, it can be a while before you recover your costs and you see a return on your investment. It is estimated that losing an employee in the 1st year will cost the company up to three times the salary of that person. Even though nothing is bulletproof, having a solid recruitment strategy and process in place is crucial.
Contact us today to get help in creating a structured recruitment process!