The Real Cost of Hiring

When we consider the cost of hiring, we think advertising costs and maybe a bit of labour, but the truth is the costs are much greater and they are usually just absorbed into the business without a thought. 

It takes 48.5 hours to recruit a new hire and a worker is productive for just 30% of their week so if we convert the 48.5 hours required to hire, into working weeks it will take 3.5 dedicated 40 hour working weeks to make one hiring acquisition.  How do you feel about that?

Hiring on average is made up of 25 hours of job posting and reviewing. 
Top tip - having a thorough understanding of the job description, employment contract, and the businesses’ policies and procedures is essential in the sourcing, screening, interviewing, and hiring phases of recruiting. 

Hiring involves 4 hours of pre-screening and short listing. 
Top tip – stop hiring on skills to avoid passing over great potential new hires.  There are other elements that should be included in your screening. 

There are 12 hours of interviewing. 
Top tip – to avoid bad hiring decisions and missing out on top talent through the interviewing process it is essential the interviewer has undergone training for this function. 

Finally, there is 7.5 hours of checking and hiring such as reference checking and preparing employee documents. 
Top tip – adhere closely to your Recruiting Policy to ensure good hiring decisions are made.  Incidentally the average interview to hire ratio is 4.8:1 but 3:1 reflects great hiring practices.

The cost of a new hire is apportioned over the tenure of that hire, so it makes sense to hire for the short, medium, and long term not just for short term relief. 
Top tip - never hire out of desperation.  The cost of a new hire can be 200% of the position’s gross annual remuneration and a good hire will have a tenure of 3 – 5 years but a bad hire will leave within in 3 – 12 months making this a very expensive exercise indeed. 

Making great hiring decisions will elevate your employee engagement, improve productivity, and increase profitability, and our services and training and development programmes will add market share growth and business resilience to your gains, so I invite you to reach out to us today.