As any business owner or hiring manager knows all too well, hiring is expensive. In fact, with the various costs associated with bringing on new employees, each new hire could cost you up to twice as much as their starting salary. While adding good talent to your team is absolutely worth the associated costs and more, it is important to understand how hiring costs break down to make sure the candidates you plan to extend the job offer will be worth their expenses. Beyond the base salary, major hiring expenses include:
- Taxes. When hiring new employees, you should plan to pay at least three separate taxes. The first tax will be half of each employee’s 12.4% social security tax on their first $113,700 earnings. You will also be responsible for one half of each employee’s Medicare tax, which applies to all earnings and is not capped like social security taxes. The third tax you will be responsible for is unemployment insurance with a standard rate of 0.6% for the first $7,000 of earnings.
- Benefits. Benefits account for approximately 30% of each employee’s hourly compensation cost. That 30% is comprised of health insurance, retirement benefits, paid leave, and supplemental leave and other miscellaneous costs. Although it is uncertain how the Affordable Care Act may or may not impact these current costs, 30% is still a fair line to benchmark per each new hire.
- Training. Training and other additional costs can add up fast when bringing on new hires. Even if you do not need to bring in an outside source to bring your new employees up to speed, the valuable time you or your other core employees will need to take to train your new hires can cost you in production or daily output. You will also want to consider if you will need any additional supplies, equipment, or office space for your new hires that will result in extra costs.
If the total cost of bringing top quality employees on board seems too high for your business, try consulting with a niche staffing firm. FootBridge Energy knows the ins and out of the energy sector including where to find the best candidates and how to get the best outcome with your hiring budget. Contact FootBridge Energy today to consult with the energy industry’s most experienced staffing partner!