May 24, 2016 8:00 AM
An unexpected departure from an employee can leave owners in a tight bind. Recruiting and hiring a new employee is a big undertaking for any company. Just like employee separation, the replacement process can cost your company a lot of time and money.
The Costs of Employee Replacement
Employees leave companies for any number of reasons. No matter the situation, their replacement won’t be cheap. In fact, it can cost up to 50 percent of an entry-level employee’s annual salary to find a replacement. That percentage goes even higher for employees with more experience.
Replacing one employee can be costly enough. Hitting a period where you have multiple employees leave around the same time can really hurt the company coffers. Just a few departing employees can potentially mean hundreds of thousands of dollars in replacement costs.
Why Replacement Takes Time
Even if you’re looking to replace someone quickly, it’s important to try and find the right person for the job. That means spending time to go through the hiring process. Necessary but time-consuming replacement costs during this time include:
- Recruiting applicants
- Entrance interviews
- Employment Testing
- Pre-employment administrative expenses
- Medical exams, drug testing, background checks
- Training costs
Making a rushed hiring decision can end up hurting you in the long run. Think of the time you spend during the replacement process as an investment in your future. Sure, a person might be able to fill a role right away, but unless you take the time to make sure that they have the right skills and are a good cultural fit for your office, you might end up having to replace them sooner than you’d like.
Recruiting and replacement takes time, and sometimes you just don’t have much time to give. Teaming up with a Professional Employer Organization like Group Management Services can allow your company to spend the time necessary to recruit, train, and retain new employees.
At GMS, we’re in the business of making your business simpler, safer, and stronger. Contact us today to see how we can help with your recruiting needs.