In business, there are some expenses you just can’t get away from. The pandemic has driven the ‘Great Resignation’, with over 50% of Americans looking for a new job. If you’re a small business owner, that means recruitment costs, possibly many times over.
But exactly how much is the average cost of hiring a new employee? What goes into that, and is there anything you can do to reduce the cost?
Let’s take a quick look so you can save those hard-earned dollars.
What Is the Average Cost of Hiring a New Employee?
Two organizations specializing in human resources have published their estimates.
The Society for Human Resource Management claims the average is $4,129 and that it takes 42 days to fill a post. Glassdoor estimates it costs $4,000 and 52 days. There’s not much in it and one thing is clear – it ain’t cheap.
These figures don’t tell the whole story. There’s the potential knock-on effect of low morale if a key employee leaves. Plus, it takes time for new hires to find their feet.
New Employee Hiring Guide
Hiring a new employee is as simple as posting an ad online and doing a couple of interviews, right? Sadly, no.
Sorting through resumes, arranging interviews, and training new hires all take time. And time equals money. Then there’s the additional cost of running background checks and even drug testing for some jobs.
You’ll also need to make sure that you are scrupulously following the law in all your hiring practices. If not, costly lawsuits could be heading your way.
These days jobs there are a lot more jobs than applicants. Recent figures show a 4.8 million gap between job openings and unemployed workers. Clearly, you’re going to have to sugarcoat that job offer to get people through the door!
Offering a sweet new hire swag deal could help. You may be able to reduce the cost of onboarding gifting by working with a new hire swag platform. They can help you put together a welcome package including everything they’ll need on day one.
New Employee Hiring Tips
Before you set out to hire a new employee, have a clear strategy in mind.
Are you going to use a recruiting firm? If not, do you definitely have the resources to handle the entire process in-house?
Consult with your team before writing the job description. Include qualifications and skills, but also describe the values of your business. This will help you find someone who will be a good fit.
Disclose the salary when you advertise. This will help to sift out under and over-qualified candidates. Then use a recognized career website to advertise the role.
Budget for Hiring New Employees
With the average cost of hiring a new employee standing at around $4,000, it’s important to budget accordingly. Handling the recruitment process in-house could save a few bucks, but only if you know what you are doing. It’s a competitive recruitment environment so you might need to sweeten the deal to recruit the best talent.
If you’ve enjoyed this article, we’ve got lots more for you! Head over to our Business section for more handy guides today!