Behind the Paycheck: The Hidden Costs of Hiring
July 1, 2013 | Staffing Blog
Whether you’re running a DC, making widgets, or selling shoes, that business has to make money. That’s business 101: profits have to exceed expenses. On the surface it sounds simple, yet not every business has discovered the key component to success. That key is: the price of goods and services is not necessarily the cost of the goods and services.
This is especially true when it comes to hiring. Businesses may be tempted to look solely at the hourly rate without taking into consideration the hidden costs that can quickly drive up the overall cost. An experienced staffing agency can more efficiently handle the extra work that’s part of the hiring process and keep your overall costs low.
Employing a staffing partner dedicated to the hiring, the interviews and the paperwork can save your company time, money and frustration.
Finding qualified employees takes time, but it’s also critical to your overall cost savings to have the right people in the right jobs. They will be more efficient and committed, therefore reducing turnover and increasing efficiency, which translates into a bigger bottom line. A comprehensive recruitment and interview strategy will go a long way toward reducing the number of workers you need.
Let’s stop to look at the many pieces involved in hiring and how a qualified staffing agency can help:
Recruiting and interviewing. How many people will you have to interview to find the best candidates? If you have 100 spots to fill, will you need to interview 300? Do you have the time and staff?
Employee classification compliance. Transfer the risk of improper classification to a reputable staffing company, especially seasonal hires.
Workers’ compensation. What is the long term cost risk associated with a bad W/C experience? It takes three years for a bad year to go away on your record. Are you sure you want to hire those additional hourly staff?
Drug testing. Think not only of the cost and time of drug testing yourself but the employment practices risk associated with it. Transfer that risk.
E-verify. You don’t want to be in the position of having hired people who haven’t been properly vetted. Transfer the risk to a reputable staffing agency.
Background checks. Are you in compliance with the new EEOC rules associated with background checks as basis for hiring? Put the burden on a staffing company.
Turnover. What happens when people leave? Can you replace them in a timely manner or does the whole recruiting process start over? This can cause costly delays in production.
Thinking through the full process reveals a budget beyond an hourly wage and demonstrates how hidden costs can drive up the price that looked so good in the beginning. Remember, you really do get what you pay for – that’s also business 101.