It is a new year, which means new strategies and new ideas to reach your business goals. This time of year we often find key business decision makers hit the ground running with ideas after having some much needed R&R. But does your plan involve staff changes, particularly hiring of employees? If you need to make some big changes to staffing structures in order to achieve your 2020 business goals, you need to understand the hidden costs and challenges.
The employment landscape is changing. People are switching between jobs more now than ever. Small and medium businesses are growing through digital at a fast rate. Business owners and decision makers need to plan for hiring and firing as much as possible.
So what are some of the hidden considerations and costs of hiring new employees?
1. Recruiting and Hiring Costs
When searching for jobs, the ads seem pretty straight forward right? Any HR manager can tell you otherwise. With recruiting, effort put in directly impacts the talent you attract and their initial opinion on your business. You need to put time into writing the description, ensuring you are accurately reflecting the position, using the right voice to really sell the position. If it is a new position, you need to research market averages for salary and benefits. This is all done before you even have a job ad up.
From there, it then takes time to screen all candidates, organise interviews, hold interviews, ring references and more.
Don’t forget the costs incurred to actually place the ads on job searching sites or promote on LinkedIn/Facebook.
Now the total cost of all of the above depends on your current business structure. If you have an internal or outsourced HR manager, this forms part of their salary and time. Some choose to engage an external recruiting company or headhunter, so keep in mind their fees and charges come into play. If you are a small business and you do this all yourself, then think about how much you value your own time and how long it will take you to recruit.
There are several studies and figures out there, although they all roughly conclude the same stats: On average it costs $5,000 and 40+ days to recruit a new employee.
2. Training and Onboarding Costs
So you have filled your position, congratulations! This next phase between recruiting and the employee settling in is often where the hidden costs really hurt businesses from failure to plan and budget.
Some of the hidden training and onboarding costs include:
- Time lost by the trainer who is responsible for the new employees training;
- Time lost by the new employee training, signing contracts, learning where everything is and other onboarding tasks required before they can jump into working; and
- Costs of administrative areas such as printing contracts, payroll set up, training programs, setting up IT, new access cards and more!
The good news, in 2020 there are innovative and affordable options to make this part of hiring a new employee suitable for your business and budget. Digital onboarding platforms such as myjoboffer.com.au can help do all the hard work for you.
3. Salary and Benefits
Once you have your employee set up on your payroll, you are finally at the final step of hiring. But now you have the added costs of another employee, which includes salary, benefits, uniforms, cost of adding an extra onto your payroll system and all the other common expenses.
These costs are often one of your greatest investments, as people are the key to success (especially if you are operating in retail, hospitality etc.). So don’t be deterred by the cost of hiring a new employee – instead, just plan ahead! Know what you need, your budget, the timeline to fill a position, what skills need to be trained etc.