TSP • @myTSPnet
Companies are often reluctant to start the hiring process. This isn’t only because the process involves a lot of time, but it also consists of a lot of money simply an additional new salary. Hiring entails the cost of recruiting, training, advertising and so much more. According to the Human Capital Benchmarking Report, the estimated that companies spend an average of 42 days to fill a position and $4,129 per hire.
Hiring takes a lot of time, money, and patience. Here are some expected hiring costs across all industries — when your company decides to start hiring, you’ll know exactly what to prepare for and expect.
EXTERNAL HIRING TEAM
When starting the hiring process, some companies choose to have a third-party help. Sometimes it’s not necessary to have an internal hiring team, and companies, particularly small businesses, can hire through an agency. These recruiters are experts in sourcing and screening processes. They take the time to find candidates, interview them and decide which job they would be best suited for. It’s pricey to pay these external resources, around 15 to 25% of the employees' annual salary, but it saves the company a great of time — ultimately, the team can focus on internal tasks.
INTERNAL HUMAN RESOURCES (HR) TEAM
If your company does have its own HR person or team, it also comes at a significant price. While an HR manager has more on their plate than hiring new employees, it’s part of their workload. This ensures that your company can gain insight and maintain control over internal practices. It also means that you can cultivate a company community and culture. An in-house HR department comes at a price as a typical HR worker's salary can range from $91,000 to $120,000.
CAREER PAGE AND EVENTS
Having a career page on your company's website that’s discoverable is crucial. When a potential employee first begins their search, the career page on your website is the first place they look. Keeping it up to date with a great design is essential — this cost should be kept in-house but will still be added in the overall expenses.
Along with your company's website, future employers also search for job openings on other platforms. Companies can post listings online, and many of them must be paid for to be displayed. Online websites like LinkedIn cost around $500 a month, and sites like Monster could cost about $375 for 60 days. Other listings can be in person through career fairs held at community centers or local colleges — this entails handing out materials and answering questions. To participate in these career fairs, there is a cost in time to attend as well as potentially travel fees. Advertising your company's job opening will take several expenses no matter the platform.
A significant part of hiring is making sure you are selecting a loyal employee. Therefore, it’s vital to know all aspects of a candidate before they join your team. You can verify many aspects of their lives through background checks like education, previous employers, and criminal backgrounds. These backgrounds can vary anywhere from $5 to $80, but it’s necessary to make this important hiring decision.
ONBOARDING AND TRAINING
After deciding to hire a new employee, it takes time to get them acclimated — potentially taking several weeks for an employee to reach their total productivity. Before this point, a company is losing time and money. Every company hopes that the lost time and money will be a positive return, but until they can fully handle the tasks on their own, the company is at a loss. The onboarding and training period is significant, companies need to ensure they are efficient to continue to work at full speed as quickly as possible.
All in all, there’s a lot of time and underlying fees that go into hiring new employees who will also be receiving a new salary. Before starting this process, it’s essential to know where your money is going exactly so the proper plans and processes can be implemented to prepare accordingly.