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Thinking of hiring your first employees? As many employers soon find out, hiring staff is expensive. Here are just some of the hidden costs that come with hiring employees…
Recruitment
Recruiting new employees will mean having to do some job marketing – this could mean paying for ads on job listing sites, paying for ads in your local newspaper or hiring a recruitment agency. You then need to factor in the cost of training, which could involve setting up e-learning services, enrolling employees on a course or accounting for wastage/human error during training.
Whilst hiring experienced staff can save you money on training, you’ll likely need to do more extensive job marketing when hiring such staff. If you’re hiring a recruitment agency, do your research in order to find a company with a good reputation so that you’re not wasting your money on a useless recruitment agency.
Insurance
It’s a legal requirement to take out employer’s liability insurance when hiring employees. If employees get sick or injured whilst working for you, this insurance will cover you against any claims they may make. If you fail to have this insurance, you could receive costly fines.
You may want to take out other insurance schemes when taking on employees such as professional indemnity insurance, which protects you against claims made by customers that are sick or injured as a result of employee negligence. This scheme is not compulsory but could be recommended in some trades as a precaution. By shopping around for insurance, you can find the cheapest rates.
Health and safety
It’s also a legal requirement to have certain health and safety measures in place when hiring employees. This includes supplying certain safety equipment and putting in place fire safety measures such as having a clear fire escape and a smoke alarm. Your employees are in their right to hire employment lawyers to make claims against you if these health and safety measures aren’t put in place. It’s worth splurging on health and safety to reduce the risk of claims made by employees as well as lowering the cost of insurance.
Employee benefits
You also need to be able to pay for certain employee benefits. Employees are entitled to a certain amount of paid time off for vacation leave as well as sick leave for when they are sick. On top of this, you’ll need to make regular contributions to their 401k.
There may be other benefits that you want to put in place such as a work phone, a company car, paid health insurance or paid lunches. Such benefits can improve employee loyalty by showing that you’re willing to spend extra employees. Certain benefits such as a company car or discounts on local services could even improve your employees’ quality of life outside of their work.