Whether your small business is growing or a departure has left a vacancy in your company, you realize it’s time to hire a new employee.
While the benefit of having that person join your company is valuable, the cost of hiring them — beyond their actual salary — can add up.
To ensure you’re budgeting accurately for your next round of hiring, keep all of these often-overlooked costs in mind.
The Cost of Finding a New Employee
Unless you already have someone in mind for the job or were lucky enough to have the perfect candidate show up on your doorstep, you have to spend time, effort and resources searching for the right person to hire.
Writing for The Balance Careers, Susan M. Heathfield points out that you can either pay an internal recruiter to find someone — in which case you need to pay their salary — or you can pay the fees to hire a headhunter. The latter is a quick solution, but it can be much more costly.
A less costly option can be to post your position(s) on an online job board. There are many options to choose from, including large companies like Indeed or ZipRecruiter, but local options, such as Hometown Opportunity, can offer a more cost-effective, regionally-focused solution as well.
Still, according to Nikoletta Bika of Workable, recruiting tasks like posting the job on online boards, creating branded swag to distribute, communicating with applicants and conducting interviews and assessments all add up in both time and money.
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The Cost of Training Your New Employee
Once your new employee has joined the team, they’re not immediately ready to get to work. You need to spend time training the new hire so they’re equipped to perform the job you hired them to do.
According to a 2017 study by Training Magazine cited by Investopedia, the average time spent training an employee is 47.6 hours, which can translate to about $1,886.
Depending on how involved and complicated the work and employee’s responsibilities are, that amount of time spent instructing, mentoring and checking work can vary.
The cost of training also depends on if the employee’s peers can perform training or if higher-paid managers need to sacrifice their time to oversee orientation.
The Cost of Getting Your New Employee’s Workspace Set Up
Orientation involves more than just instruction: It involves the workspace and equipment preparation, too.
Annie Mueller of Investopedia calls this “workplace integration.” It can involve a varying amount of time and money depending on how much arrangement needs to be done.
This could involve getting them licenses for software, obtaining furniture or equipment you don’t already possess, printing business cards and identification badges, registering them for a work cell phone, and even setting up their desk and chair.
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The Cost of Paying for Benefits for Your New Hire
Beyond their basic salary, the benefits you pay for your employees to be content and enjoy a healthy standard of living will cost you, too.
Mueller points out that ongoing benefits like health and life insurance, disability and dental coverage, retirement plans, and tuition reimbursement should be calculated for.
Don’t forget indulgences like on-site beverages, happy hours, holiday bonuses and vacation time.
Keep Your Small Business Running With Resources From Minster Bank
The next time you need to hire a new employee, take time to crunch the numbers to decide which hiring, training, and orientation methods are best for your company and budget.
At Minster Bank, we have a variety of resources to keep your small business running. From business checking accounts to small business loans, Minster Bank helps small businesses thrive.
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Published by Minster Bank
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