Choosing the right candidate for a job can be very challenging. After investing so much time and money to recruiting a potential candidate, you want to make sure you are going with a candidate that will be with your company for the long haul, as the hiring process can be very pricy.
Hiring a new employee for a company can be a huge investment for any company, regardless of size, and that is why so much effort is placed on it. It is a very complex procedure as you must go through a detailed screening process, but it doesn’t stop there. You will learn that filling a position will require skill, patience, time and money.
How much does it cost to hire an employee?
There are many factors that will make up the price of hiring an employee. Factors of determining a true cost can include the type of job being filled, skill set needs, education, certifications, and even backgrounds in language. Training, secondary licensing and security screenings are all factors which can increase the cost of hiring a professional.
In a 2017 study conducted by Training Magazine, employers spent an average of $1886 annually to train one employee. Now these are not the only costs you must consider, as the benefit package and salary must also be factored in. For an individual who is making $50,000 a year, you would easily find yourself paying around $65,000 to $70,000 to hire them.
Here are just some of the things to consider when hiring an individual and why it’s best to use a professional recruiting service for your professional hiring needs.
Internal hiring team
It is a fact that most small business owners devote about 40% of their time to tasks that do not produce income. This includes hiring an employee. It is advisable to partner with a recruiter because the agency will be paid for performance or successfully recruiting a new candidate for your business. This will cut down the need to devote a team of employees to spend countless hours going through the hiring process and screen hundreds of resumes and countless individuals to fill multiple positions. Utilizing recruiting services will ensure your team can continue performing their other important tasks while the hiring needs are being done behind the scenes without disruption to the work at hand.
Job Board Fees and Ads
Job board fees can be very pricy and may not bring you the experience level that you need to fulfill the vacant position. Many companies are spending anywhere between $200 to $300 on job board fees per position to fill one position. This fee does not guarantee that the right individual will be identified. Often times businesses find themselves needing multiple outlets to gain visibility for their vacancies. This can add up to a lot of wasted money and time spent.
Professional recruiting services can identify the most effective resources, sites and advertising to target the greatest audience and to create the greatest ROI on recruiting dollars.
Hiring wrong employees which either lead to termination or an employee leaving because of bad fit also creates a tremendous cost. A Harvard Business Review article points out that as much as 80% of employee turnover is due to bad hiring decisions. But more importantly, a study by CAP (Center for American Progress) reveals that the average turnover cost to a company can be as much as 1.5 times an employee’s salary. So the cost to replace an employee earning $40,000 is $8,000 but as the position moves up the tier in a company, so does the cost. The total cost of replacing an CEO earning $100,000 could be 213% of their annual salary at $213,000.
Investing in employees and finding the right candidate for a job can be very costly. If you want to save yourself time and money you should partner with a professional agency who specializes in recruiter services, and which excels in hiring successful candidates for all company types.
CA HR Services specializes in working with small and medium-sized companies to help develop legal, efficient and appropriate HR processes and procedures that meet state and federal labor law requirements.