The cost of hiring an employee can vary depending on the industry, role, and location, and there is no one-size-fits-all answer to this question. However, we can provide some general information and statistics that can give you an idea of the costs associated with hiring an employee with the average annual salary of $53,000.

According to a report by Glassdoor, the average cost per hire in the US is $4,000. However, this cost can increase or decrease based on the length of time it takes to fill the position. Here are some general estimates:

  • 1 week: Companies that fill a position within one week generally spend less on recruiting and hiring, with an estimated cost of around $3,000 to $3,500 per hire.
  • 2 weeks: Companies that take two weeks to fill a position can expect to spend an average of $4,500 to $5,000 per hire.
  • 3 weeks: Companies that take three weeks to fill a position can expect to spend an average of $6,000 to $6,500 per hire.
  • 4 weeks: Companies that take four weeks or more to fill a position can expect to spend an average of $7,000 to $8,000 per hire.

It’s important to note that these are general estimates, and the actual cost can vary depending on numerous factors, such as the size of the company, the industry, and the location.

In addition to the tangible costs associated with hiring an employee, there are also intangible costs that can affect a company’s bottom line. These costs can include:

  1. Time spent on recruitment and onboarding: The time spent on recruiting, interviewing, and onboarding new employees can take away from other important business activities. According to a study by Work Institute, the cost of turnover can be as high as 33% of an employee’s annual salary, largely due to the time and resources spent on recruiting and onboarding.
  2. Lost productivity: When a position is vacant, there may be a loss of productivity or a need for additional resources to compensate for the vacancy. According to a study by SHRM, the cost of lost productivity due to a vacant position can range from 50-150% of an employee’s annual salary.
  3. Reduced employee morale: Frequent turnover and difficulty in hiring can affect the morale of existing employees, leading to decreased productivity, and increased turnover rates. According to a study by Glassdoor, companies with low employee satisfaction and engagement levels can experience a 33% decrease in stock price over a period of one year.
  4. Damage to company culture: When a new employee is not a good cultural fit or does not align with the company’s values, it can lead to a negative impact on the overall company culture. According to a study by Deloitte, companies with a strong culture can experience up to 4x revenue growth compared to those without.
  5. Training and development costs: If a new employee requires extensive training or development to become fully proficient in their role, it can add additional costs to the hiring process. According to a study by Training Industry, the average cost per employee for training and development is $1,286.

What is one way to mitigate a company’s exposure to inefficient hiring? By partnering with a staffing company, companies can reduce the costs and risks associated with hiring and ensure a better fit for their organization.

We will now shift to areas that companies should consider when working with a staffing company. We will outline the hard and soft costs of hiring an employee without using a staffing company and the benefits of using a staffing company to mitigate exposure.

Hard Costs of Hiring an Employee Without Using a Staffing Company

  1. Advertising costs: To find suitable candidates, companies may need to spend money on job postings, job fairs, and recruitment agencies. According to a survey by the Society for Human Resource Management (SHRM), the average cost per hire is $4,129.
  2. Onboarding and training costs: new hires often require training, which can be costly and time-consuming. According to a study by Training Industry, the average cost per employee for training and development is $1,286.
  3. Salary and benefits: Companies must also factor in the cost of salaries and benefits, which can vary depending on the position and industry. According to Glassdoor, the average base salary for a new hire is $53,000 per year.

Soft Costs of Hiring an Employee Without Using a Staffing Company

  1. Time spent on recruiting and interviewing: The hiring process can be time-consuming, taking away from other important business activities. According to a study by Work Institute, the cost of turnover can be as high as 33% of an employee’s annual salary, largely due to the time and resources spent on recruiting and onboarding.
  2. Reduced productivity: When a position is vacant, there may be a loss of productivity or a need for additional resources to compensate for the vacancy. According to SHRM, the cost of lost productivity due to a vacant position can range from 50-150% of an employee’s annual salary.
  3. Reduced employee morale: Difficulty in hiring can affect the morale of existing employees, leading to decreased productivity, and increased turnover rates. According to Glassdoor, companies with low employee satisfaction and engagement levels can experience a 33% decrease in stock price over a period of one year.

Benefits of Using a Staffing Company

  1. Cost savings: Staffing companies can help reduce the cost of recruitment by taking on the advertising and screening process. According to a survey by Staffing Industry Analysts, companies that use staffing firms can save up to 20% on hiring costs.
  2. Time savings: Staffing companies can also save time by pre-screening candidates and presenting only the most suitable candidates for the job. This can save time and resources in the interview process.
  3. Reduced turnover: Staffing companies can help reduce turnover by ensuring that candidates are a good fit for the company culture and values. According to a study by Deloitte, companies with a strong culture can experience up to 4x revenue growth compared to those without.
  4. Flexibility: Staffing companies can provide flexible staffing solutions, such as temporary and contract workers, to help companies manage workload fluctuations and seasonal demands.
  5. The use of Technology to address Skills Shortages: One of the biggest challenges employers face when hiring top talent is skills shortages. According to a survey by ManpowerGroup, 69% of employers globally are struggling to find the talent they need. In the US, 87% of employers reported a skills shortage in 2020, up from 75% in 2019.
  6. Drive Diversity and Inclusion Initiatives: Employers are placing a greater emphasis on diversity and inclusion in their hiring processes. According to a survey by Glassdoor, 76% of employees and job seekers consider a diverse workforce an essential factor when considering job offers. Additionally, 67% of job seekers say a company’s commitment to diversity and inclusion is an essential factor when considering job offers.
  7. Casing a wider net to drive Employer Branding: Employer branding has become critical in attracting top talent. According to a survey by LinkedIn, 72% of recruiting leaders worldwide agreed that employer branding has a significant impact on hiring top talent. Additionally, 59% of job seekers reported that a company’s brand reputation is essential when considering job offers.
  8. Enhanced Candidate Experience: Employers are increasingly focusing on providing a positive candidate experience. According to a survey by Talent Board, 70% of job seekers say that the candidate experience they receive influences their decision to accept a job offer. Additionally, 60% of job seekers reported that they had a negative candidate experience.

While hiring new employees is a necessary part of business growth, it can also be a costly and time-consuming process. By partnering with a staffing company, companies can reduce the costs and risks associated with hiring and ensure enhanced efficiency across most facets within the organization. However, not all staffing providers are the same and such, drive different results. Regardless of why you might choose a partner, make sure they align with a long-term strategy and act as an extension of your brand.

For more information on how you might streamline your hiring process please email [email protected].

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