Is It Cheaper to Keep an Employee or Hire a New One?

Is it cheaper to keep an employee or hire a new one?
Employee Benefit News (EBN) reports that it costs employers 33% of a worker’s annual salary to hire a replacement if that worker leaves. In dollar figures, the replacement cost is $15,000 per person for an employee earning a median salary of $45,000 a year, according to the Work Institute’s 2017 Retention Report.
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Whether it is more cost-effective to keep an employee or hire a new one is one of the most pressing concerns that organizations have to deal with. The cost of hiring and training new employees, the price of employee turnover, and the contribution that each person makes to the company all play a role in the answer to this issue.

The price of hiring and educating new hires might be high. This covers the expense of job postings, recruiting costs, and the time required to screen resumes and conduct interviews. The price of training new hires to become productive workers is another expense. If the person has a specialized job or a rare skill set, these costs may be quite significant.

However, the expense associated with employee turnover might also be high. This covers lost productivity while the post is unfilled as well as the price of hiring and training a successor. Additionally, if staff members believe that turnover is high and job security is low, this could have a detrimental effect on morale and team dynamics.

The value that an employee offers to the company should be taken into account when deciding whether it is more cost-effective to keep them or hire new ones. This covers not only their qualifications and experience but also how they contribute to the company’s culture and their interpersonal abilities. In general, keeping high-performing workers who are a good match for the company is frequently more cost-effective than continuously hiring and onboarding new workers.

How then can small firms utilize LinkedIn for hiring? Finding and connecting with potential applicants is made easier with the help of LinkedIn. Small businesses can utilize LinkedIn to advertise job positions, look for applicants who have particular skills or expertise, and establish direct contact with candidates. Additionally, LinkedIn provides a number of premium recruiting tools that can aid companies in expanding their reach and finding the ideal individuals more rapidly.

Free hiring is possible using a variety of strategies, including social media, personal recommendations, job fairs, and internship programs. Job vacancies can be shared with a wider audience by posting them on social media sites like Facebook and Twitter. Because current employees are frequently the finest brand ambassadors for the business and may assist identify new prospects, referrals can also be a valuable recruiting technique. Additionally efficient methods for locating and attracting new talent include job fairs and internship programs.

And last, there are a variety of recruitment tactics that companies can employ to locate the best individuals. A few of these are recruitment firms, targeted advertising, internet job boards, and employee referral systems. The secret is to identify the optimal combination of methods for your company and to iteratively enhance your hiring procedure over time.

In conclusion, a variety of variables affect whether it is more affordable to retain an employee or hire a new one. Although hiring and training new personnel might be expensive, employee turnover can also be expensive. In general, keeping high-performing workers who are a good match for the company is frequently less expensive than continuously hiring and onboarding new workers. The goal is to identify the correct combination of methods that work best for your firm. Small businesses can utilize LinkedIn and other recruitment strategies to find and attract fresh talent.

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