Top 3 Hidden Costs
When it comes to hiring, the real cost goes beyond the salary and benefits of a new employee. Here are the top three hidden costs to consider:
Cost of not having someone in seat
Every day that a position goes unfilled, work is piling up and productivity is taking a hit. The longer it takes to find the right person, the more costly the delay becomes. According to the Society for Human Resource Management (SHRM), the average position takes 42 days to fill at a cost of $4,100. This is in addition to the average of $1,800 a month that is lost when a job remains vacant. If you add that to the possible one month salary cost of vacancy you can have a cost of over $5,000. In fast growing startups, that opportunity cost is orders of magnitude greater.
Thinking about open roles in your company - how much revenue is lost every month for each open Account Executive position?
Cost of a bad hire
A bad hire not only means lost productivity and wasted training resources, but it can also damage company culture and lower morale. Plus, the cost of terminating an employee and starting the hiring process all over again can add up quickly. The average financial cost of a bad hire is up to 30% of the employee’s first-year earnings according to the U.S. Department of Labor. This doesn’t include opportunity cost - and for key roles at startups, this is easily multiples higher.
Cost of thinking you’ll figure it out yourself
Attempting to fill a position without the proper resources and expertise can lead to a longer, more expensive hiring process. Utilizing a professional recruiter with a network of top-tier candidates can reduce the time to fill positions by months and allows you to better utilize your time on other pressing business objectives.
By taking these hidden costs into consideration, companies can make more informed decisions about their hiring process and ultimately save money in the long run.