Recruitment an Expensive business

•It should be noted that the costs of time and lost productivity in hiring a wrong employee can easily reach 150% of the employee’s annual compensation figure.

•Some of the main factors you and organizations need to consider when calculating the cost of recruitment are :

Departing Employee

• Temporary cover for vacant post and lower productivity
• Administration costs for departing employee – payroll, pensions, etc.
• Lost skills and investment in training
• Loss od goodwill from customers
• Possible downturn in morale of remaining employees

Recruitment and selection

• Manager’s time spent analysing the vacancy and specifying the job
• Time spent in briefing/working with external agencies
• Direct costs of working with external agencies
• Direct advertising costs
• Administration costs – sending out job information, letters, arranging selection events, etc.
• Manager’s time – shortlisting, interviewing, selection, taking up references
• Training costs – ensuring everyone has the necessary skills to recruit

New employee

• Induction and job skills training
• Manager/employee’s time spent in orienting new person
• Administration costs of new employee – payroll, pensions, etc
• Cost of the new employee being less than 100 per cent productive for weeks/months
• Disruption to the department as the new person gets up to speed
• Cost of any new equipment such as company car, mobile phone, laptop, etc.

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