Everyone knows it costs money to hire new employees: An open position has to be advertised, interviews have to be held, backgrounds have to be checked and all paperwork associated with this has to be filled out.
The actual cost of a hire varies, based on job level and hiring methods, but every employer can relate to the issue of talent acquisition costs getting out of control.
Let’s take a closer look at the actual costs of hiring a new employee that are often overlooked.
Time is money
Between screening an applicant, setting up an interview and contacting each candidate’s references, any lost time in the process translates to lost money. Those making hiring decisions must take time away from other duties to handle unexpected issues, such as tricky logistics in setting up an interview.
Lost time is lost for good. That’s why it is crucial to have a smooth, well-defined candidate selection process; one that is easily understood by both candidates and those inside the company. It’s also important for hiring managers and leadership to fully embrace the process once it has been established.
If you look a little deeper at hiring costs, you may discover that a larger proportion of costs are associated with onboarding new workers compared to the actual hiring, and many hiring personnel have a blind spot for these costs.
Onboarding calls for a great deal of paperwork, including benefits forms, tax forms, reviewing employee handbooks and NDAs. While paper and ink associated with this paperwork won’t make a major dent in your budget, real costs come from the amount of time it takes to complete all that paperwork and take care of other administrative tasks. If an HR worker makes $25 an hour, 50 employees are hired annually, and it takes 10 hours of admin for each hire — it equals $12,500 per year in costs, just to fill out paperwork!
There are a handful of ways you can minimize onboarding costs. First, digitize as much as possible. Second, ask new hires to fill out as much paperwork as they can before their first day. This can cut down on time hiring personnel must wait before being able to process forms.
Decreased productivity is typical of ramp-up periods for new employees. New staff members get less work done than experienced staff members because they’re still figuring out how to handle duties, navigate communication processes and build effective relationships. Furthermore, new employees ask a lot of questions and answering these questions pull experienced staff away from their duties.
The key to mitigating productivity losses is to ensure your onboarding system goes beyond paperwork and orientation. Make a plan for each worker to get the training and mentoring they need to get to up speed ASAP.
Need help hiring?
At Cornerstone, we work with our clients to ensure their talent acquisition costs are budget friendly. Please contact us today to find out how we can help your company find its next great employee.