Employees are the backbone of U.S. businesses. In fact, about 134 million Americans were employed in 2023, representing about 60% of all people aged 16 and older. So, it makes sense, as former CEO and chairwoman of Xerox Corporation Anne M. Mulcahy has said, “Employees are a company’s greatest asset—they are your competitive advantage. You want to attract and retain the best; provide them with encouragement, stimulate and make them feel that they are an integral part of the company’s mission.” However, it takes wisdom and good recruitment practices to hire a new employee that will add to the culture of an enterprise and boost its productivity.
Why Good Hiring is Essential for Every Business
Good hiring has always been important, but it is even more essential for every business in today’s highly competitive business environment. A well-developed recruitment process can help an enterprise foster business growth by bringing in talent that will help increase its output and better satisfy its customers. Hiring new employees can bring in fresh perspectives and increase skillset diversity. Strong new talent will add value to the company, make it easier to attract additional great talent, and boost retention rates. Hiring individuals who fit the company’s culture will improve the workplace culture and boost morale. Strong new talent can help a business be more competitive and better adapt to change. To hire a new employee is to help grow a business.
Signs it is Time to Hire a New Employee
For a small business owner, the signs it is time to hire a new employee are: first, you have strong indications that your employees are overwhelmed. Second, your customer service appears to be slipping. Third, you find yourself in the uncomfortable position of saying “no” to new business. Fourth, you feel you don’t have the bandwidth to tackle new opportunities. And fifth, you see the need to hire more junior-level talent to free up higher-level employees to do more value-added and business-building work.
How Much Does It Cost to Hire a New Employee?
The U.S. Small Business Administration estimates that it typically costs 1.25-1.4 times the persons salary to hire a new employee. According to a study from the Society for Human Resource Management (SHRM) the average new hire cost is about $4,700. However, many employers report that the total cost to hire a new employee can be three to four times the position’s salary. If external recruiters are used, a commission of 15% to 30% of the employee’s first year salary (or a similar straight fee) will be applied.
Other costs include job posting fees, employee referral bonuses, background checks, testing services, onboarding and training, possible relocation costs, office costs like a desk and chair, computer, cell phone, and office supplies. The actual cost to hire a new employee will depend on company size, the seniority of the position to be filled, the role of the individual, and location of the company.
Choose an Expert Payroll Service
Choose an expert payroll service, Palmetto Payroll, to assist you with your payroll system. We have offices in Columbia and Charleston, serving over 300 business owners statewide and we offer tailored solutions to save you time and money so you can thrive and grow including payroll, tax depositing and filing, management reporting, Human Resource services, and timekeeping services.
