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Cost of Hiring

Hiring Costs

The decision to make a hire is an important one.  Hiring decisions are typically based on workload and cost considerations.  Here is some important data related to the costs of hiring.

    1. Recruitment & Staffing – According to the National Association of Colleges and Employers (NACE), the average cost to make an entry-level hire is approximately $8,900¹ including college recruiting salaries, expense reimbursement, travel, relocation, etc.
    2. Training – Training costs vary widely by organization.  Our research shows that average annual training costs per employee range from $1,000 to $1,500.  We would expect that training costs for entry-level employees would be somewhat higher than the overall average.
    3. Recurring Employment Costs – The average entry-level business positions that we fill have a salary range of $30,000-$50,000 per year, depending upon geographic location, degree requirements and market conditions.

        • In addition to salaries/wages, there are a number of other costs associated with employment which, when aggregated, are defined as the overhead burden associated with the hire.  Some are mandatory (i.e. workers’ compensation insurance, state unemployment taxes (SUTA), federal unemployment tax (FUTA), social security taxes, and Medicare).  Other costs are defined as discretionary and include health insurance, dental, vacation, tuition reimbursement, sick time, etc.

        • Bureau of Labor Statistics’ data show that the overhead burden as measured by the category “Total Benefits” (which includes mandatory and discretionary benefit-related costs) is now over 40% of the average annual income in the U.S.


      • Cost of Compensation (Per hour Worked) – Q3 Data in Each Year

          Total Benefits Ave. Wages & Salaries Benefits %
        2009 8.05 19.45 41.39
        2010 8.20 19.68 41.67
        2011 8.33 19.91 41.84
        2012 8.58 20.36 42.14
        2013 10.53 23.43 44.94

  1. The Costs of Turnover -  The rule of thumb in business is that it generally costs 2-3 times the average salary of the person leaving the job to replace them.  This includes redundant recruiting and interviewing costs, redundant training costs, lost production and efficiency while the position is open, and overtime to make up the work.  Clearly, turnover is expensive.

The decision to hire is an important one.  The bottom line:  Your hiring process needs to be both efficient and successful in delivering long-term retention.  The GradStaff business model for entry-level positions has been designed to eliminate out-of-pocket recruiting expenses and reduce turnover.  We offer the most cost-effective way to fill entry-level positions across the US.  To learn more about how to make your entry level hiring more efficient and cost effective, go to Hiring Companies.


¹ NACE's 2012 Recruiting Benchmarks Survey figure for companies with 1,000-5,000 employees.

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