Paying a salary can feel like a hefty enough fee for any business that wants to expand its team. However, in exchange for the skills and labor that your workers bring, you are going to be paying more than just the salary alone. Here, we’re going to look at some of the unexpected costs of hiring workers, and what you can do to make sure you’re staying on top of them.
Recruitment
The average cost of recruiting new employees, typically known as the cost per hire, is around $4000. This changes from company to company and based on the employee themselves, but you can learn more about how to measure the cost per hire for yourself. Using referral schemes to get employees more easily from reliable sources, as well as building things like talent pools and alumni networks can make it more cost-effective, not to mention quick, to find good hires to fit into new positions. Otherwise, a lot of time and money can be spent on looking for and narrowing down candidates for the job.
Training
Training your employees is valuable for a whole host of reasons. It can help you incorporate new skills in the business, retain employees that desire career development, and boost the overall productivity at your company. However, whether it’s the initial training or training new skills, the costs of not just any courses, but internal training resources and time spent training can add up, so it is important to factor these costs into the hiring and staff retention budget for the sake of accuracy.
Liability
Your business has several responsibilities to the people that hire, including helping cover the costs of work-related injuries and illness. However, another one that shouldn’t be forgotten is unemployment insurance, which comes at the end of the employee’s time at the company, should they resign or be fired. It’s important to learn more about the tracking software that can help you manage these costs. However, it’s important to make sure that you’re not doing anything unethical to try and reduce the employee’s ability to claim compensation that they have a legal right to.
Benefits
You have your legal responsib8ilites to your employees, but you may also have additional financial responsibilities based on the benefits that you agree to. Benefits can help create a much more lucrative job offer to attract a higher quality of clients, but you might want to be careful in tracking the costs of benefits. If you find that the cost per employee is too high, then stratifying benefits so that not everyone gets the same package can help you save money. However, benefits can often pay for themselves if you use their leverage properly to acquire employees who can make higher returns in productivity as result.
Although these costs may seem high, it is important as a business owner to know what your break-even point is. A hire only really becomes worth it for the business if you can measure that point and then make sure that they meet it.