For many 2012 was a banner year showing solid returns. So much so that many of you are feeling frustrated about not having enough hours in the day to get everything done. Nice problem to have, but it’s still a problem. Right?
So now you’re struggling to decide if 2013 is the right time to hire that new employee you so desperately need, someone to take over some of your workload. But you’re concerned about the expense, and responsibility, of hiring new staff. Know that you’re not alone, and that there are a few good options available to you. Let’s first look at…
The Obvious and the Not-So-Obvious Costs of Hiring
We know that salary is just the beginning in terms of cost. Before your new employee even sets foot in your office let’s look at the direct costs associated with …
- Obvious: Advertising and interviewing costs — think number of ads and whose time is being used reading all the emails, sorting through resumes and doing the initial candidate pre-screening.
- Obvious: The time you and your managers need to spend (away from your otherwise billable time) in interviewing, short-listing, more interviewing, talking with references, writing and revising employment agreements
- Not so obvious: Starting all over again if what you’ve just gone through doesn’t produce the talent you need.
Are you ready for all that? Have you considered all the options available to get the help you need? Consider for example temporary staffing or a fixed price contract worker to get you through your peak busy times.
Taking a Longer View on Hiring Costs
An employee who is successful in your company can return between 10 and 20 times on your investment. Woohoo, sounds great. Wait a minute. What about the hidden costs of getting someone new up to speed? You’ll need to take a look at the unavoidable investment of time required before you see a return on your new employee.
According to this Investopedia report, the break-even point of a new mid-level management hire — that is the time it takes for your new employee to show a return on your significant spend on the earlier mentioned pre-hire costs, plus the post-hire costs of salary, benefits, asset allocation and training — is typically a whopping 6.2 months, broken down as follows:
Weeks 1-5 = 75% x employee cost
Weeks 5-12 = 50% x employee cost
Weeks 13-20 = 25% x employee cost
Consider the Costs of NOT Hiring
Now that I’ve scared the begeezus out of you on hiring, you’re probably thinking this is a little peculiar considering the nature of my business. This is not the case at all really. You see it really is important to me that you make your decision to move forward, or not, on hiring with all the facts at hand.
So let’s look at some of the tell-tale signs that signal it really is time to hire.
- Are important tasks at work starting to fall between the cracks?
- Are you losing customers due to missed orders or poor quality?
- Are employees starting to complain about workloads?
- Are you seeing any increase in employee sick days or stress leave?
- Have you been so busy you’ve forgotten anniversaries, birthdays or other important family events?
Yes, it’s always a good idea to keep a sharp eye on costs as you think through the pros and cons of hiring. But do think carefully before you put off hiring. In other words, don’t lose sight of what the costs are if you don’t.
Do consider all of the options available to you before you post your help wanted sign. Temporary or contract staffing can offer you the flexibility and ease of bringing in a fully trained and highly skilled worker at a fraction of the cost, without the added responsibility of employing a full-time permanent employee.
Added bonus: Temporary staffing also offers an ideal “try-hire” scenario. What this means is you get to see that person perform in real life on the job. Then you’ll know for sure whether or not they’re the right fit for you and your team.
Other Helpful Hiring Resources:
- The Cost of Holding on to Bad Hires: www.badhirecalculator.com
- 10 Questions You Must Ask Before You Hire Anyone: www.ashtonassociates.com/free-report
Easy Win-Win Hiring Strategies is a six part series by Barbara Ashton, President & Chief Recruiter with Ashton & Associates Recruiting Inc.
Up next in the series:
- Processes for Sourcing, Screening, Hiring & Onboarding
- Identifying Skills and Competencies that Make a Successful Hire in Your Company
- How to Prepare Effective Interview Questions Ahead of Time
- How to Evaluate Against the Job Profile
- Knowing What Makes You a Great Employer
About Barbara Ashton …
Barbara is an energetic recruiter focused on delivering bottom-line results to growing businesses. From international boardrooms to BC start-ups, her industry experience has saved individual businesses tens of thousands of dollars, and made many of them even more. Working throughout British Columbia, across Canada and internationally, her track record in connecting businesses with talented professionals spans well over 25 years, and she is the past recipient of numerous industry awards for marketing, recruitment and consulting excellence.