To maintain a manageable staffing budget, you need a clear understanding of your staffig costs. And you can do this by calculating cost per hire for new workers you bring on board.
How to calculate your cost to hire per employee
This is a fairly easy, but valuable process. Follow these steps:
Tally all the expenses that went into hiring new staff. This includes advertisting job openings, staffing agency charges, relocation expenses, employee referral bonuses, etc. This does not include the cost of the new employee’s salary.
Add the hiring expenses together.
Divide by the number of new employees. How many new workers did you bring into your company during this round of hiring efforts? Just divide for a clearer understanding of cost per hire.
How to make good hiring choices
As you track your cost to hire, you’ll get a better idea of what worked and what did not. You can also follow these tips to make hiring more cost-efficient:
Rely on your recruiter. Yes, you will pay a fee when you work with a staffing agency. However, you may find this cost is minimal when you compare it to searching for new workers on your own. Recruiters help you save on advertising charges, plus they make your time to hire shorter—and easier. Simply explain to your recruiter the type of candidates you’re looking for, put together job descriptions and let them do the legwork.
Write clear job descriptions. The more descriptive, the better. You should explain exactly what the job entails, what your company culture is like,and list exact qualifications required. Clear job descriptions will help candidates self-select which jobs to apply to, and will make your resume review and interview processes much more focused.
Know who you’re looking for. This may go without saying, but to work well with a recruiter and/or write focused job descriptions, you’ll need an exact understanding of the type of candidate who will do best in your open job opportunities. If you work with a niche recruiter who specializes in your field, they can also help you narrow down what qualifications will help a candidate excel.
Do your homework to avoid turnover
The more forethought and careful consideration you do on the backend, the better hiring choices you’ll make. And this will help you avoid the high cost of employee turnover.