Hiring costs are not limited to salaries. In this blog, we list hidden hiring costs that companies should know about – including tips on how to minimize them.
Running a company requires a talent pool to effectively contribute to the business goals and development. But just like any other investment, finding a dedicated team within your area comes with extra cost. And we are here to tell you that this process comes with hidden costs that you should know of.
Here is a list of common hidden hiring costs to watch out and prepare for:
- Job ads
A sponsored job ad on Indeed, for example, can cost at least a minimum of $5 per day or $150 per month. Opting for a free job post is possible across multiple platforms,for sure. However, improving visibility and attracting more candidates on job boards works best with job ads.
- HR and Recruitment fees
Recruitment fees can go up to 20% to 25% of the position’s basic salary. And that only covers just one position. Should you have your in-house recruitment team, or are still acquiring services from recruitment agencies, you also need to add the recruitment specialist salary to the total expense.
- Background checks
Depending on your country or area, a background screening is required during the hiring process. Even if not, conducting background checks would still be beneficial to the company by preventing or reducing criminal activity. International background checks can range from $32 to $300, according to Checkr.
- Training and development
A huge hidden cost that many employers fail to consider is training and development expenses. This applies not only to new hires, but also to the existing talent pool.
- Workplace injuries or insurance
Depending on the level of work risk, workplace injuries and insurance costs range from one industry to another. But on average, the average annual premium cost for an employee in 2023 for employer-sponsored health coverage was $8,431 for single coverage and $23,968 for family coverage in the US. And in the UK, employers' liability insurance ranges from about £61 per year for a single office worker, up to £213 or more for a trade worker for a small to medium-sized business. And if you’re in Asia, expect an increase in employer-sponsored medical plans in 2024 by 9.7%.
- Employee engagement programs
According to a recent study, providing an engaging and fun working environment improves productivity and creativity among employees. Losing employees because of disengagement might cost you almost $16000 per year in the US, USD 5,690 in the APAC region, and £44 billion in the UK annually.
- Office set-up and utilities
When hiring, a subtle, but high, hidden cost is office set-up, equipment, and utilities. Which could cost 19% to 27% of the total employee benefits budget according to SkyNova.
Minimizing these hidden hiring costs
Here are some tips to cut down on these hidden hiring costs without compromising business reputation and still improving product and service quality:
- Create an efficient recruitment workflow for your hiring processes. This way, your HR, talent acquisition, or recruitment teams save on time and unnecessary tasks.
- Employee retention programs. Minimize rehiring, training, and attrition costs with programs that employees find benefits in. One thing to consider is providing a remote or hybrid work set-up. Recent research by Accenture shows that 83% of global workers saw a hybrid model as ideal.
- Performance management. Measuring workforce performance through programs or systems ensures effective talent management. KPIs would differ depending on the business goals as well as its industry. Some factors to look at are: productivity, attendance, output-based performance, quality of work, etc.
- Outsourcing and automation. Many companies, whether start-ups or big enterprises, consider offshoring and outsourcing when minimizing hiring costs. Saving your company time and effort in managing talents means that you also save money. Automation, on the other hand, improves efficiency by eliminating the need for repetitive tasks and minimizing workload.
How CC.Talent helps.
CC.Talent helps organizations find top-notch professionals through outsourcing. We always find the perfect match between organizations and top talent from the Philippines. Whether it's one professional or an entire remote team. You can count on a new colleague and a flawless integration of your needs, company culture and team within your targeted budget.