How much does it really cost to hire a new employee? The answer isn’t as straightforward as you may think. You have to consider additional and ongoing expenses, including advertising, training, benefits, necessary equipment and helping your new employee integrate into the organization.
Advertising and Recruiting Costs
You may only advertise when you have an open position or you may hire a placement agency to recruit candidates for you. Either way, advertising and recruiting costs are ones that companies often overlook when they consider the cost of an employee. Between marketing efforts and the time a recruiter spends during the hiring process, recruiting costs can be as much as $3,000 per an employee. And depending on the type of positions you need to fill, it can be more than that.
Once a candidate is found to fill a job opening, your company will have to invest in initial and ongoing training. Organizations can spend as much as $1,000 or more on one employee for new hire training. A company often devotes as much as 23 hours a year per employee to make sure they are adequately trained for their position.
With the rising costs of insurance premiums, organizations spend as much as two times a base salary on benefit packages for their employees. And if your company likes to offer more than mandated benefits, such as retirement packages, your organization’s benefit costs will be higher.
What are the costs of equipping a new employee with everything they need to do their job well? There are many costs that companies overlook, including:
- Mobile phone
- Tablet or laptop
- Company car
- Office equipment
If the person works out in the field, you may have to also provide them with a gas card and expense account for costs they occur while traveling for work.
The total costs for a new employee will vary depending on your organization’s specific needs, however you need to consider all of the expenses included with filling an open position when considering what you spend on new hires. This makes finding quality employees that much more important, because a new employee will offer a better return on your investment than a person who won’t perform up to company expectations.
Hiring a recruiting agency, like Job Store Staffing, is a good investment because they will help you reduce turn over and help you locate top candidates that fit your needs. Contact us today to learn more about finding the right employees for your business.