The Cost of Hiring a New Employee
The Employee hiring process is a very hectic time for a company. Although it varies by industry and region it is always surprising to see that the total cost of hiring a new employee in a corporate company is as high as $5000. The cost may also depend on the individual you are hiring; it includes advertising cost, recruiter’s salary, travel expenses, sign-on bonuses, employee referral bonuses and third-party recruiter fees. For certain executive level jobs, the company may also have to bear the relocation costs as well.
Breakdown of hiring cost
Whenever a company hires an employee, there are always expenses that are going to cost some money. The breakdown of the cost of hiring an employee is listed below:
Advertising agency fees
Sign-on bonuses
Recruiter’s salary
Travel expenses for staff and applicants
Third party recruiter fees
Employee relocation costs
Employee referral bonuses
Cost and impact of a bad hire
Why companies spend so much on the hiring process? Well, it is important to spend more time and money in hiring on merit than to just take anyone in your company just to save time and money. If you hire a wrong person in your company the bad hire will impact badly in a lot of ways. The productivity can be dropped to less than fifty percent which makes an issue in completing the task, not for the person himself but also the other team members. If the person is not already trained or is just an internee, the company will have to spend more time in training the employee and that’s how the time will be consumed to train another worker. The cost of training is also an important factor in this process, if the employee is unaware of the work completed, the company will have to spend a lot of time in training process but also money will be spent on him. The new employee’s morale might negatively affect the people working around in the workspace. The employee might have a negative impact on the client side too if not taken care of or told to work with the client’s requirements.
Causes of a bad hire
These are the possible causes of a bad hire in a company:
Need to fill a job quickly
Unsure of the person or a mistake
Didn’t check the references
Insufficient talent or intelligence
In order to save a company from the impacts of a bad hire, one must hire the best possible recruiters who can save the company from the bad hires and save from additional cost and time waste.
