The True Costs of Recruitment
How much taking on a Graduate costs compared to an Experienced Candidate
Hiring staff in itself is a timely process, taking up valuable time and resources of any business, and hiring the right employee is even more time costly. If the best candidate for the job is selected it can enhance your work culture, office environment and pays you back a thousand times over in high employee morale, positive forward thinking planning and a productive team.
However, depending on the role, business owners searching for new employees face the predicament of either investing in a recent graduate or playing it safe with an experienced candidate. In terms of salary, the difference is an obvious factor, but what are other considerations an employer should take when onboarding?
We teamed up with the experts over at SmallBusinessPrices.co.uk who conducted an interesting study in to the true cost of hiring in 5 key job employment sectors including accountancy, technology, retail, advertising and legal to look at the often overlooked aspects of recruitment.
Recruitment
From advertising and marketing the job vacancy to the selection and selection process, hiring staff can be a long and tedious procedure for both the potential employees and employers.
The ‘attraction and marketing’ costs involved in recruiting in the accountancy industry was the lowest in the study at only £800 compared to a massive £5,191 in the legal sector. When it came to the selection and assessment process (the most time- consuming process) the cost was £1,181 per employee across all sectors. From marketing a job to assessing candidates, the combined total of businesses is an average of £3,356.
The Pay-Gap
Unsurprisingly, salary is the largest financial difference between graduates and experienced employees, although certain career industries offer larger financial incentives for loyal employees.
Law graduates offer the biggest prospects to potential employers, earning an average of £38,000 at the graduate level, however, jumping to an impressive £64,000 after 3 years. While, those in the IT and Technology industry earn an average of £11,000 and more after 3 years, from £19,150 to £30,000. Across all of the 5 industries, the average starting salary for graduates was £24,000, which rises to a massive £35,700 after 3 years experience.
Pension Contribution
With planning for the future being so important to anyone joining or on the career ladder, the amount put away for pension might not be at the forefront at an employees’ but it is still important. Employers contribute an average of 3% of salary as part of pension schemes.
With a huge starting salary, law graduates cost their employers over £5,000 in the time they typically stay in the role in just pension contributions. Employees with 3 years experience spend an average of 6 years in a role and set employers back £6,865 during their time with a company
Both types, graduates and experienced candidates are able to offer so much to a company when they join, but it’s always important to consider the impact they’ll have on resources.
Ian Wright from SmallBusinessPrices.co.uk has stated that
‘Employees can offer so much to companies of any size, but it’s always important to consider the financial impact they have as well. Some business owners would rather train someone from scratch, almost like an investment, but the value of an experienced employee is that they can hit the ground running. While these are fairly obvious assumptions, it’s interesting to see the hard figures and how it varies across different industries.’
There is no denying the fact that searching and onboarding is an expensive process. Deciding on recent graduate or an experienced candidate depends on many factors you have to take into account before hiring.
Not all companies are in a position to commit to the resources and finances needed for training a graduate so it maybe advantageous to hire a candidate who has already received the necessary training.
Before you take on a new recruit, explore The True Cost of Hiring and to see how recruitment differs depending on the industry in question.