To make money, businesses need to spend money. This is especially true for businesses that need to locate and hire new talent as full-time employees. There are numerous costs associated with hiring a new employee, many of which can pile up long before the interview process has even begun.
In this blog, we’re hoping to shed some light on the costs required to hire new employees, how it can quickly add up, and how we can help offset those costs.
The cost of hiring a new employee can vary depending on the hiring company and the type of hire. According to the SHRM database, the average cost per hire when recruiting standard employees is $4,425.00, and when recruiting executive employees, the cost skyrockets to $14,936.00.
This disparate pricing scheme results directly from executives being more desirable and requiring more enticing offers to bring onboard. Additionally, it takes a longer time to get an executive hire due to the rarity of such qualified individuals actively seeking employment. With these statistics in mind, it becomes a question of where the money goes.
These costs might seem like they come out of nowhere, but there are several factors that influence how these numbers add up regardless of the qualifications needed or the type of position being offered.
Even with the accessibility of the internet, employers posting job listings online will still have to pay to promote those roles. Regardless of platform or channel, there will be a cost to pay as long as the advertisement stays up. For example, the job listing website Indeed charges $5.00 a day to sponsor a job. And then there’s the intangible sum in the time it takes to write the post, and publish the listing.
With the shortage of qualified employees and the competitive market the candidate-driven landscape is creating, many practices are offering attractive bonuses to lure the best candidates.
Another major cost involves the cost of travel for staff, applicants, or the recently hired. Sometimes an applicant will be applying from out of town and require financial assistance traveling to the interview location. But additional financial assistance is not limited to travel costs. There could also be costs associated with relocating an employee, child care, or a variety of other factors that all help to create an attractive offer.
One intangible cost of cycling through employees at a high rate is the damage it can cause to your brand as an employer. We live in a highly connected world. If you aren’t caring for your employees, other prospective employees are likely going to hear about it. The costs are difficult to quantify, but if your company’s HR department’s bad reputation precedes your company, you could expect the regular costs of finding and hiring employees to be greatly exacerbated.
The costs that incur with constantly replacing employees can be substantial and prohibitive, especially for companies with high turnover. This is especially true when you think about how every time you publish a new role, you have to reinvent the wheel to write, publish, attract, hire, and onboard the best talent.
But when you partner with an employment and workforce solutions provider like ESSG, you can get out ahead of the main cause of the high cost of replacing employees: high turnover. With ESSG, not only do we streamline the costly and time-consuming hassle of running a business and managing employees, but we care for your employees and see to their needs like nobody else.
You’ll be taking proactive steps to create a healthier, and happier workforce, the key to lowering turnover and absenteeism.
Hiring new employees is always a costly process, though some instances might prove to be more expensive than others depending on the candidate or the position. When looking at average costs between nearly $5,000.00 to nearly $15,000.00 per hire, finding ways to mitigate these costs becomes essential.
By far, the best method to offset these costs (and to run a better business) is to partner with ESSG. With our employment and workforce solutions, you can return your focus to running and growing your business, and rest easy knowing your employees are in good hands.
If you need a trusted partner who can help you build a happier, less costly employment strategy, contact ESSG. We specialize in taking care of your “back office” services so you can focus on what you do best.