HR Data Solutions

How Much Does Onboarding an Employee Actually Cost? Take a Look

Nothing in life is free, including looking for employees. The cost of hiring a new employee is way more than you think, and the average employer looks/organizes for 24 days.

Do you know how much time and money you are spending on hiring and employee turnover? Want to find out? Use our free calculator and generate this report for your COO and CFO today (

If you’re curious about just how much the time over those 24 days can cost you, keep reading below.

1. Job Posting Costs

In the old times, you could just post a job ad on Craigslist and get some decent applicants. But now that sites know how desperate employers are for quality talent, even Craigslist will charge you to make a job post.

Some sites, like the big job search sites, will let you post your first opening for free – but they neglect to tell you that it’ll only stay active for so many days. In some cases, your job posting seems free, but you’re forced to buy into a membership if you actually want to see information about your applicants.

Even if you’re okay with spending money to post a job listing, you still don’t know you’re posting in the right place. Maybe you listed an ad on Monster, but the candidates you want are on LinkedIn.

Or maybe the quality of candidates you want is so high, they don’t check online job boards at all. They only work on a personal call or email basis.

No matter the avenue you choose, you’re up for about $100-$1000 initial listing fees alone.

2. Time Spent Sorting Through Applicants

Time is money and that’s never truer than when you’re paying someone to go through and read resumes. If you’re a small company and you don’t have a dedicated HR team, that means that something else isn’t getting done.

Either you’ll have to keep the employee who’s working on applications on longer that day/week to do their regular duties, or farm them out to other people. Overloading other employees isn’t a good solution either – as their tasks won’t be as high quality as you’re used to.

If you had an employment or recruiting firm, then you could pay a flat fee and have the resume sorting done for you. They know exactly what you’re looking for based on the information you gave them, and they’re professionals. They can sort through those resumes faster and more efficiently than anyone in your office could because it’s their job.

3. Interview Time and Paperwork

Once you’ve found the applicants you like, you’ll have to spend time interviewing them, calling references, and doing skill checks.

If your company does background checks, that’s not only time – but there’s a cost involved in running them. A professional background check can cost anywhere from $30-100, depending on the detail you’re interested in.

Drug testing is another cost, if that’s something your company does, and trust us, they should. A full panel drug test runs a couple hundred dollars, so you’ll have to front that as well.

Now you’ve already spent at least $300 on this candidate, and what happens if their background check or their drug test isn’t clean? You have to start over with another candidate, and now that’s more money you’ve sent down the drain.

Screening Multiple Candidates

The same, “we have to start over” situation doesn’t only happen with bad tests. It can come from someone not having the availability you need, from lying about their skills, or from a bad reference.

If you hire someone from an employment company, they’re already background checked. That’s fifty bucks you don’t have to spend – and it means you won’t have any expensive surprises if you decide they’re not the candidate for you.

They’ll have cleared the hours with the potential employee before they’re even invited to apply, and they’ll have checked references and skills for you. What else could you ask for?

After all of this, how do you know if they match your company’s culture? Learn how to map your company’s culture here:

4. Training Time

In all jobs, you’re going to have to train new hires for a period of time. The lower the quality or the less experienced the new employee, the longer the training period will take.

And that means you’re not only paying your new employee to learn things (that they should have already known), but you’re paying someone to train them.

If that trainer is in-house, there’s now work they’re not getting done so they can help the new person.

A recruiting firm can’t completely cancel out the learning period, as there are specifics to your business, but they can reduce it by supplying well-educated applicants.

5. High Turnover

Finally, after all that, and about $4,000 on average, the new employee could decide you’re not the right fit after all. Now you’ve invested time and quite a bit of money in the person, and you have to start the process over again.

That’s not efficient and it’s not helping you build your business. If you work with a recruiting firm, they have procedures in place to help you find a new person (quickly), in case this happens.

Granted it’s a lot less likely to happen if you work with a recruiting firm, but the system is there if you need it.

Wondering what your personal company cost is? Use our calculator.

The Cost of Hiring a New Employee

From listing fees to time spent reading resumes to background tests to on-the-job training time – hiring a new employee is expensive. Even if you’re on the low end of that $4,000 figure, it makes the costs of working with a recruiting firm look a lot better, doesn’t it?

If you’re looking for a way to cut down on the cost of hiring a new employee and are ready to get it right the first time, click here.

We’re ready to help you, and we can’t wait for you to meet our candidates.

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