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AUTHOR: ALEKS PETERSON—GLASSDOOR
The cost of hiring a new employee isn’t limited to recruiting.
We all know that it costs money to hire. Recruiters, including client service professionals, have to advertise on job sites, conduct interviews, run background checks, and dispense and retrieve all of the paperwork associated with adding an employee.
But did you know that, according to Bersin by Deloitte, the average cost per hire is almost $4,000?
That number will vary, depending on job level and hiring practices, but every hiring manager can relate to the problem of inflated talent acquisition costs. Why does bringing on a new employee –which is supposed to be a business solution–drain so many resources? Why do accountants and financial executives pale at launching a candidate search with a recruiting agency San Francisco?
If you look deeper, the issue has more to do with onboarding a new employee after the hiring decision than recruiting. Many HR professionals have a blind spot for this part of the process, particularly in the context of a recruiting agency San Francisco.
Several factors can silently, insidiously hike the cost of employee onboarding:
Onboarding requires a lot of paperwork–benefits enrollment, tax forms, employee handbooks, NDAs, arbitration agreements, etc. But you probably don’t spend enough on paper and ink to significantly dent your budget. The actual cost sink comes from the time it takes to manage completing that paperwork and other administrative aspects of onboarding with recruitment agencies in San Francisco. Let’s say a recruiter makes $25 an hour, and you hire 50 new employees per year, and it takes 10 hours of administrative time to process their documents. That adds up to $12,500 annually–probably a conservative estimate for larger companies.
You can minimize this time in a few ways, primarily when considering USA Jobs customer service roles. First, digitize your onboarding paperwork. Many HR software solutions on the market can bring all of the hiring processes’ administrative tasks into one system, with self-service access for employees. Second, you can ask your new hires to complete all their paperwork before day one. That way, they won’t waste paid time filling out forms; they’ll spend it learning the job. According to Aberdeen, “best-in-class” companies are 53% more likely to begin onboarding before day one.
If you invest weeks of time and effort into onboarding only to see an employee quit six months later, you’ve essentially wasted all those resources. If this happens multiple times yearly, the financial impact can be devastating.
Research shows that being more intentional and structured during onboarding can help stave off early turnover. For example, a case study by Corning Glass Works found that employees who attended a structured orientation program were 69% more likely to stay with the company for three years. That’s probably because good onboarding sets clear expectations for employees and equips them for success, making them less likely to encounter surprises.
Another hidden onboarding cost comes from the reduced productivity typical of ramp-up periods, when a new hire is still learning their role and getting acclimated to the work environment–i.e., “learning the ropes.”
New employees get less work done because they’re still figuring out how to execute their responsibilities, navigate new communication workflows, and establish relationships. For example, they might have to research an account and get up to speed before working with decision-makers on that account. Some sources suggest an employee can take eight months to become productive.
The answer is to expand your onboarding process further into the “probationary” period. Don’t just cover the paperwork and administrative portion; make a plan for each employee to receive the training and mentoring they need to succeed. Sit down with them regularly and see how things are going. Do they have the resources they need? Have they encountered any problems with processes or coworkers?
Every new employee must get set up with a particular array of “stuff.” That could include anything from a laptop and headset to software credentials, key fobs, ergonomic chairs, monitors, parking permits, and branded clothing. All of this stuff costs money.
You will only be able to eliminate some of it, especially if it’s required for the employee to function. But there are ways to be responsible with provisioning to reduce costs in the long run. For starters, keep track of everything you give out to new employees, and try to standardize the process as much as possible. An inventory system for hardware and equipment is a good idea, particularly for the best staffing agencies in San Francisco that might hire 100-plus people every year.
On the IT side, consider the impact of technology on your ability to scale. Suppose your company is still working from a collection of desktop-based systems. In that case, you’ll need to purchase a new license and run multiple installs every time you add a team member, not to mention the expense of doing this for remote workers (versus the ease of adding users to a web-based platform).
Even as you try to cut costs associated with hiring new employees, remember that one of the most expensive recruiting mistakes is a slipshod hiring process that yields uncommitted client service professionals. You’ll pay the ultimate price when those employees quit in nine months. Be innovative and efficient where possible, but don’t cut out crucial steps to save a few bucks.
This article originally appeared on Glassdoor.
“Our company consistently receives high quality candidates from Tekberry. They understand our functional and cultural needs, and they take the time to actually talk to and screen each candidate.”
Glenn K.
R&D Lab Manager, Fortune 500 Electronics Manufacturer
