At some point, every company is going to need to bring in new employees. Unfortunately, this can be incredibly time-consuming and expensive. In many cases, companies end up spending thousands of dollars to find talented employees on their own. The costs include advertising fee, referral bonuses, travel expenses for applicants, and more. When it comes time to hire a new employee, many companies don’t even consider these costs and quickly find themselves out thousands of dollars.
Costs Associated with Hiring a New Employee
While the costs associating with hiring employees can vary wildly depending on the industry and the region, even the lowest costs associated with hiring a new employee are often near $1,000. With so many little costs associated with hiring an employee, many companies never take the time to add up all the items to see just want it costs them to bring a new employee onboard.
Some of the most expensive costs that companies will incur during the hiring process come from advertising the job listing. Getting the job put on online job boards can help companies find more candidates, but not all of them will be qualified, which means that the company is also going to pay more in time costs for a current employee to sift through all of these applicants.
Referral bonuses are commonly used as an incentive for current employees to help bring in new employees. These bonuses are only gifted if the referral candidate is hired, but some companies allow for numerous referral bonuses to be given out when hiring more than one candidate at a time, which quickly adds up.
Sign-on bonuses are common in many industries, and that means that companies in those industries may need to grant them to be competitive when it comes to landing new employees. Not to mention, there are also salary expectations and benefits that often include a retirement matching program and health insurance.
If you are hiring for a position that very few people will be qualified for, you may need to bring in applicants for interviews that are from out of the state. These applicants will need to be flown into town for an interview on the company’s dime, and depending on the situation, they may also need lodging covered. Plus, if you wish to hire a candidate that lives out of state, relocation fees may be necessary to get them to commit to the position.
Many companies will hire in-house recruiters to find new employees, which means that the company is paying a full salary for someone to bring in new employees. This cost should be considered when you are determining how much you are willing to pay to get the right candidate. In some cases, companies don’t want to pay a salary to a recruiter, so they hire a third-party recruiting company to help find qualified candidates, which can add to the amount spent to hire a new employee.
What Happens When You Make the Wrong Hiring Decision?
Unfortunately, not all hiring decisions will be the right ones. Even someone who seems like the best candidate may not work out in the end. When a company hires a candidate who either quits or they quickly fire, it can be a very costly mistake. The company might be on the hook for severance, and then the hiring process starts all over again.
Often bad hires are caused by one of three different things. First, a company may decide that they need to hire a new employee as soon as possible, which leads to a candidate that isn’t ideal for the position. Another reason companies have identified that causes bad hires is that there is insufficient talent intelligence. When companies don’t check references, it also opens them up to bad employees. Sometimes, however, it is impossible to tell just where the company went wrong in the hiring process. To prevent any of these from occurring, companies can hire a recruiting firm that will sift through applications and vet the candidates.
Hiring a Recruiting Company
Using a recruiting company, especially in an industry that requires highly specialized training and skills, can actually save companies money throughout the hiring process. For manufacturing and engineering industries, these costs can be on the high side of the cost-per-hire scale. For these reasons, it may benefit companies looking to hire manufacturing and engineering employees to use a recruiting service. Recruiting companies can help negotiate salaries and benefits as well, which can lead to lower costs for the company.
If you are looking for an engineering or manufacturing employee in the Kansas City Metro Area, contact Austin Nichols Technical Search for help. Austin Nichols has a large pool of talented candidates who will be thoroughly vetted before they ever reach the hiring manager’s desk. For hiring help, call Austin Nichols today at 816-471-5575.
