No matter the size of the business, no experienced HR professional could dispute that the hiring process is a costly one and why companies look at hiring as an investment. It is also why employers tend to be cautious about hiring, especially during a turbulent economy.

According to data from the U.S. Bureau of Labor Statistics (March 2012) the average direct cost for a new employee, based on a 40-hour work week is $63,835.20, which includes $44,241.60 in basic wages and $19,593.60 for benefits and taxes.

Imagine what the cost would be to bring back the United States to full economic recovery with employment of 5.3 million workers!

Note that these numbers fail to include workplace integration or apportioned costs for rent, phone, Internet, training, office furniture or travel and expenses, all of which can vary and add up quickly depending upon job requirements and industry.

What comprises the hiring process?

When thinking about hiring a new employee, an employer considers several underlying factors relative to the company’s need. For example, is there an in-house candidate who can perform the job? Can the tasks effectively be parsed among current workers? Is the need temporary or permanent? Can the job perhaps be outsourced to reduce costs?

Then, if a new position is created, hard costs such as advertising, background checks and drug testing are associated.

Soft costs which take a ton of time are also incurred: developing the job description and salary range, networking, partnering with a professional staffing and recruiting firm, appointment-setting, resume-review, initial-to-final candidate screenings, negotiation and tendering of the offer, acceptance of the offer and associated paperwork details. There may also be training and equipment costs, licensing fees or other special arrangements.

Further, in determining an employee’s salary range, an employer is obligated to deduct the following from that figure before tacking on the cost of benefits:

• Social Security/FICA Taxes – 6.2% of gross pay,
• Medicare Taxes – 1.45% of gross pay,
• Federal Unemployment Taxes (FUTA) – 6.0%,
• State Unemployment Taxes (SUTA) – varies by state, and
• Workman’s Compensation- required in every state except Texas, obligation ranges between 0.3% to 7.5% of gross pay depending on the job description and industry.

Encompassing these details, is it any wonder that hiring a new employee requires dutiful consideration? Experts estimate that an employer needs approximately six months of an employee being on the job to recoup his costs. So, with the cost of hiring so significant, wouldn’t it make sense for an employer to maintain morale?

Once hired, how does an employer prevent turnover?

A wise employer doesn’t just hire and ignore his employees. Keeping employees happy so that they stay in the company’s employ is called retention. We’ll talk about that next time.

If you’re looking to partner with a firm that truly understands the hiring process, talk to us today. Recruiting professionals at The Lee Group want to serve your needs. Call the location nearest you or contact us today.

It’s not enough that an employee is a reflection of your business. Employers also may fear being held responsible for their employees’ dangerous or unfit actions; thus, they want to be careful during the hiring process.

An employer has a legal responsibility to hire someone who is safe, qualified and fit for the position. Finding out about the candidate is the first step toward fulfilling that responsibility. So, isn’t it prudent for an employer to be concerned about hiring a worker with a criminal record?

No employer wants to leave an opening for a negligent-hire lawsuit. Nor does an employer desire to have an employee who mishandles confidential information, cash, credit or financial accounts. It is important that every organization considering hiring become familiar with laws regarding criminal investigations, respective to its resident state as well as the Fair Credit Reporting Act (FCRA).

10 Types of background checks 

Employers can search the following places:

• A resume, employment verification (including education) and references 
• Social security number verification
• A criminal record check via courthouse or state records (state repositories)
• Department of motor vehicles reports
• Civil court records
• Worker’s compensation information (pertaining to state law)
• Credit reports
• Sexual offenders databases
• By asking a potential hire to be fingerprinted for a background check with the State Police or FBI
• Social media and Internet

Some red flags to look for:

• Inconsistent information
• Gaps in information
• Habitually poor credit
• Complaints, adverse actions, or convictions on record
• Arrests or convictions
• Evidence of substance abuse

As an employer, if you hire a consumer reporting agency to conduct the background check on your behalf, you will need to have authorization in writing from the potential hire prior to beginning the investigation process, and the agency must follow the rules outlined in the FCRA. However, if you do not use a consumer reporting agency, you may not be subject to the guidelines within the FCRA, depending upon what method of investigation was used.

Be aware that the potential hire is entitled to a copy of your findings and may dispute the information.

We care about serving our clients 

This information is provided as a service of The Lee Group because we care about our client companies. If you would like to know more about us and how we serve our clients, contact one of our trained recruiting and staffing professionals today. We would be happy to answer your questions.