Stephen King, the president and CEO of GrowthForce, adds that “external hires demand 18-20% more in salary than internal hires.” Depending on the state you’re in, you’re still responsible for the former staff member’s paid time off, as well as any overtime you’re paying your team to pick up the slack while you’re in transition. That’s, of course, not to mention that these new employees aren’t producing at a high level while in training. And you have to add in accommodation costs, such as purchasing special equipment or supplies. The cost of training the new hire for her specific job can be high, including the cost of preparing training materials, benefits enrollment, and administrative processing. Direct employment costs, such as signing bonuses or relocation expenses, have to be factored in, and that’s not even counting onboarding and training. So do post-interview costs, like checking references and administering pre-employment tests. Interview expenses, including travel and the time spent interviewing candidates, pad the costs. In fact, it’s not uncommon for recruiters to request 20-30 percent of a new hire’s first-year salary. Hiring costs, such as fees to recruiters or advertising, can be pricey. Considering that a survey from Willis Tower Watson found that one in three hires will leave a company within two years, you see how quickly this can add up.īut why does it cost so much to hire a replacement? As explained in “ The Cost of High Employee Turnover ,” it’s the result of several direct costs. To put a dollar amount on it, if the employee earned a median salary of $45,000 a year, this would cost the company $15,000 per person - on top of the annual $45,000.
The culprit? The hiring of a replacement. Employee Benefits News repor ted in 2017 that turnover can cost employers 33 percent of an employee’s annual salary.
0 kommentar(er)
