Running a small business in a successful manner sooner or later requires hiring an additional workforce. Adding more manpower to your enterprise will increase your efficiency and competitiveness. You’ll be able to accept more projects and simultaneously yield better results.
However, growing your team isn’t a cakewalk, since you’ll have to deal with some new expenses. In this article we’ll try to explain the nuts and bolts of the costs you’ll have when hiring additional workers.
Employees’ personal background
Including a new employee in your team means taking into account both their professional and personal features.
Most employees provide their best work in their job applications and CVs.
When it comes to their personal background, things aren’t always as clear as employers would like them to be.
The easiest way to truly get to know your potential employee is to run a check of their past experiences.
For instance, you can check their criminal record, as well as run their name in the database of sex offenders. Also, you might want to know their address history and credit score, to see how reliable and self-reliant those candidates are. You can find out more about some additional checks in the text delivered by Business Daily.
Also, you can perform these checks on your own. Bear in mind that each of them costs a certain amount of money. For example, checking criminal records may cost up to $20, while the credit score report costs between $5 and $10.
Perhaps the smartest thing to do is turn to a professional employee-checking service and have them perform all the checks for you.
Fringe benefits
Also known as employee benefits, these are the costs you’ll have to pay in addition to your employee’s wages.
As defined by Business Dictionary,
“Fringe benefit is a compensation in addition to direct wages or salaries, such as company car, house allowance, medical insurance, paid holidays, pension schemes, subsidized meals etc.”
Also, it’s good to know that some benefits are considered parts of taxable payments.
An average American worker paid $10,345 in 2016 for their medical insurance, according to the report published by CNBC. In the same article, you can read that this average annual sum per US employee will reach $14,944 by 2023.
This is the most expensive fringe benefit at the moment and it’s probably going to stay that way in the near future.
While the company car and subsidized meals aren’t the key elements that will attract people to become your employees, health benefits and pension schemes are important features. In line with that, the survey conducted in 2015 by the Glassdoor website showed that about 79% of the interviewed people said that they’d rather get better benefits than a pay raise.
All these stats should be taken into consideration when new business owners are thinking about employing full-time workers. Covering these expenses is a great way to attract and retain skillful professionals, but they’ll also take away a big part of your budget. Therefore, weigh all the pros and cons before hiring every new employee.
Recruitment procedure
A business owner who recently launched a business and already needs additional manpower probably doesn’t have too much time for anything else but work.
So, when the moment comes to start searching for new employees, it’s important to decide how you’re going to perform the recruiting procedure.
Surely, you can do the hiring process on your own. This means that you’ll be in charge of posting the job ad, handling the applications, narrowing down the number of candidates, and conducting the interviews. Sounds a bit too much for a preoccupied businessperson?
This is why you should stop for a second and consider working with a recruitment agency to find the most suitable workers for your needs. What you need to do is send them a list of requirements for the job in question and they can perform the first few stages of the recruitment procedure on your behalf.
The benefit of this move is twofold.
On the one hand, you’ll save some precious time for your core business tasks. On the other, you’ll reduce the risk of making a bad hire. The statistical data provided by Forbes indicate that a bad hire could cost you about 30% of the employee’s annual earnings. For a small business owner or a freelancer who is trying hard to keep their business costs low, such a mistake could have a fatal outcome for the entire venture.
For all these reasons, think twice before you hire a new employee and always consult experienced recruiters beforehand.
Employee training
We’ve already mentioned that a higher number of employee benefits could help you score a more knowledgeable professional. Still, in the context of a newly launched business, the budget might not be sufficient to grasp the attention of more experienced pros.
What’s more realistic is to hire an educated person with fair knowledge and some experience, but who will need to undergo some training sessions. It’s important to add these additional courses to the overall costs that hiring a new employee will generate.
The extent of these expenses will depend on the type of the training you opt for.
If you decide to work with your new employee in person, you can do the entire training without spending a single cent. However, your own business tasks might suffer here. So, if you’re too busy working on various projects, just give your employee clear instructions about the software tools or courses they need to pass.
Some niches are covered with dozens of free courses. For instance, an accountant can find loads of free courses.
Some other fields require making payments if you want to get access to valuable online resources.
Whatever training mode you turn to, make sure to prepare the budget in advance.
Conclusion
Hiring additional staff when you’re a freelancer or SMB-owner demands some time and commitment. Even if you delegate the hiring process to recruitment professionals, you should still be there to bring the final verdict when it comes to employing new workers. Make sure to calculate all the expenses in advance and get ready to cover all the bases for your employees. If you perform the entire procedure as described in this text, you should get a reliable and skillful professional who will enrich your business team.
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