Do you think nothing of adding people to your team as needed? Or do you drag your feet even when you desperately need someone because you think it’s going to take a lot of time and money? Take the time to analyze the real costs before making a decision. You make be surprised by what you find.
What does it really cost to add a new employee to your payroll? Do you know? What factors should you include? There are both internal costs and external costs. There are actual cost expenditures and there are considerations like the time managers need to divert from other tasks to conduct the interviews.
Consider these costs:
Internal Costs Can Include:
- Recruiter time and training expenses.
- Office support staff and overhead.
- Hiring manager time for interviews and screening.
- Talent acquisition system costs.
- Technology costs for ATS, CRM, and other hardware and software.
- Employee referral bonuses.
- Government compliance expenses.
External Costs Can Include:
- Advertising and marketing your company and culture.
- Cost of posting open positions.
- Background checks, assessments, drug testing, etc.
- Job fairs, recruiting events.
- Lead generation.
- Travel, signing bonus, relocation costs.
- Social media time and cost.
- Job fair and campus recruiting fees.
Take the information listed above and consider how many new hires you make in a month, a quarter or a year. Are you getting the ROI you would like? Is your process effective in identifying the right people? Keep in mind that the cost of turnover makes hiring mistakes very expensive. It can cost three times an employee’s salary or more to replace an employee who leaves your company.
One of the best ways to keep your cost to hire down is by working with a staffing and recruitment firm. When you partner with a specialist, you can access just in time talent without adding to your headcount through staffing options. Recruiters can ensure that you make the right hire the first time by leveraging their expertise, network and the economies of scale that comes through a focus on talent acquisition. Take another look at the list above and imagine how many of them you can cross off, simply by working with a recruiting firm.
At Cornerstone, we specialize in identifying and attracting great people for employers nationwide. If your organization is looking for tactics to slash your cost per hire while improving the efficiency of hiring process, contact us today.