What other costs than the salary are there when hiring an employee?

Jessica Messano / April, 2018

Description

Jessica Messano, Director of HR at Execustaff HR outlines additional costs than just the salary when hiring a new employee, which can be up to 15 to 30 percent above and beyond salary.

Video Transcript:

What other costs than the salary are there when hiring an employee?

There are many different costs that can be associated when hiring an employee. One of those costs would be the initial recruitment costs. That could be the cost of posting the job and finding the candidate. If you are using a staffing agency or recruitment firm there would be agency fees related to that hire.

Also if you choose to do a background check or pre-employment medical screening, there would be service fees associated with that as well. There would be workers’ compensation insurance as well that you would need to provide and pay for on behalf of the employee. There will be employer taxes that you need to consider, so not only are employers paying these taxes, but also the employer would need to start paying Medicare and Social Security taxes once they bring on a new hire. So that is also something to also factor into the cost of hiring a new employee.

Also, you want to factor in the cost of the equipment and supplies that the person will need to be successful in the role, the computer, the phone. Any type of equipment you want to factor in the cost in what they would need to be able to do their job.

Also, does this person need special training orientation to be able to hit the ground running in their role, that might be a cost you also need to consider.

Lastly, benefits that’s a big chunk of what employers pay for a new hire. All of these factored in can be 15% to 30% of a cost above and beyond salary.

Employers are not required to provide paid vacation or PTO time. A lot of local and state jurisdiction now do have paid sick leave requirements. That would be something that each company needs to look and see what is applicable to them and their employees as far as offering paid sick leave benefits.

It is not required for small companies to offer medical, dental, or vision benefits but there is a 50-employee threshold for the Affordable Care Act of providing medical benefits once you’re at 50 employees or more.

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  • Jessica Messano, Execustaff HR
  • April, 2018
  • 2:24
  • Team, HR & Admin

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