How much does it cost to hire a new employee? The answer may be more than you’d think. And if your company is trying to fill a number of open positions at once, those costs can really add up.
This is an important topic to consider as you weigh the pros and cons of enlisting a professional staffing and recruitment company. Will it cost you money to hire a staffing agency? Sure. But will it prove more costly than doing it all in-house? Don’t be so sure.
In this post, we’ll outline just a few of the hidden costs associated with in-house hiring.
The Costs of In-House Hiring
1. The cost of an unfilled role.
Every day that a role goes unfilled, it costs you money. It costs you money in overhead; think about the equipment or the office space that’s going unused. There are opportunity costs, and potentially the cost of lost productivity. Hiring in-house can often be a time-consuming and laborious process; you don’t want to rush things, and yet, the longer the process drags on, the more these hidden costs can add up.
2. The cost of recruitment.
When you do your recruiting in-house, that means you’re having your HR manager or some other employee to handle all aspects of the process. And this isn’t a simple process by any means; there’s a lot more to it than just posting a Help Wanted ad on the Internet. Consider just a few facets of effective recruitment:
- Taking the time to craft a written job description that accurately conveys what the role is about, and what background skills are required.
- Researching market averages to ensure you’re providing fair, competitive compensation and benefits.
- Posting your job description to different career sites or social networks, which can be both time-intensive and also pricey.
- Reading resumes, screening candidates, and creating a list of the promising contenders.
- Scheduling and conducting interviews, then making follow-up calls and reference calls.
- Arranging for background checks.
All of these tasks take time, which your HR team could be spending on other activities. By contract, a staffing firm can do all of this, and they can do it both more quickly and with better results than what you’re likely to achieve in-house.
3. Training and onboarding costs.
Once you find and hire the right candidate, that doesn’t mean the process is over.
There will be a number of administrative tasks you’ll have to do to onboard them: Gathering their paperwork and documentation, enrolling them in your payroll system and company benefits, updating worker’s comp policies, and more. Again, these are all tasks that an HR professional can do, but it takes time and money.
And there is also the matter of training your new employee, ensuring they are ready to hit the ground running. This is always going to be part of the new hire process to some extent, but if you make sure you hire the right person to begin with, it can potentially streamline the training requirements. This is where working with a professional staffing service can help save you money: They’ll make sure to bring you the very best candidate for your open role.
And of course, if you do wind up hiring the wrong person and have to repeat each step in this process, it compounds your total expense significantly; you’ll want to do anything you can to avoid turnover costs.
At Performance Staffing Solutions, we take pride in delivering cost-effective staffing and recruitment services to our clients, freeing business owners and HR leaders to focus on other value-adding activities. If you need help with staffing your business, reach out to us today!
At Performance Staffing Solutions, we take pride in delivering cost-effective staffing and recruitment services to our clients, freeing business owners and HR leaders to focus on other value-adding activities. If you need help with staffing your business, reach out to us today!
