Are you looking for ways to help your company expand gracefully? Do you fear that adding a new employee is going to put too much stress on your company budget? If so, then you should start by learning about the average cost of hiring a new employee.
Doing so can help you understand what it will cost to hire one, yes one, in-house employee. Thankfully, there is another solution; there is a way you can get your hands on the production you need.
See below for an in-depth guide on the cost of hiring a new employee, and what other options are out there that might be cheaper.
What is the Cost of Hiring a New Employee?
First, we want to congratulate you. The fact that you’re looking into adding new members is a sign of company growth, that’s something to be excited about!
That said, it’s important to do your research. How much will it actually cost you when hiring a new employee?
Generally speaking, statistics have shown that the average in-house employee costs up to 1.4 times their annual salary. So, if you hire an in-house staff member with a $50,000 salary, for example, they would cost you up to $70,000 by year’s end.
What gives? There are several reasons that in-house employees end up costing more than their gross income, such as:
- Travel expenses
- Relocation costs
- Advertising for the job posting
- Third-party recruiting fees
- Onboarding and training
- Uniforms, company swag
- Health coverage
- 401(k) matching contributions
- Background checks and drug tests
Hiring an in-house employee certainly has its benefits. It can help you retain top-tier talent and have them working for your brand exclusively. It will also allow you to keep all of your projects in-house, rather than having different aspects assigned to other companies/services.
If the cost to hire an in-house staff member overwhelmed you, then don’t fret. We have another option to present to you…
What is PEO?
Every small business has general tasks and departments that could benefit from the experience of a trained professional. Things like HR compliance, payroll, risk management, and business administration tasks are just a few relevant examples.
What if you could get your hands on an experienced team of knowledgeable workers at a lower price? Enter PEO.
PEO stands for “Professional Employer Organization”, a company that teams up with your brand to lease its employees to you for the different tasks your business requires.
For example, if you need someone to oversee your company’s payroll, then a PEO could lease its experts to you and help you get access to an experienced payroll team. You’ll have more peace of mind, knowing that those aspects are being taken care of by a trusted professional.
PEO is also a tremendous solution for those of you looking into global expansion. You’ll find that creating a new global workforce requires a lot more red tape than expected; using a professional employer organization can ensure you abide by those country’s regulations and laws.
If you’d like to learn more about global PEO, be sure to visit this site. There you’ll learn all about what they can offer your growing company.
How to Determine What’s Right For Your Brand
To insource or outsource, that’s the question. See below for a few questions you can ask yourself to determine whether you should hire in-house or through a PEO.
What Services Do I Need?
There comes a time when all business owners become aware of the holes in their current business model. It’s important to fill those holes with experienced and knowledgeable professionals.
Some of these holes might have to do with tasks like payroll, employee benefits, taxes, or business development, just to name a few. How can you fill multiple openings with a constrained company budget?
As you grow, PEO can grow with you. Rather than paying for one employee, you’ll get access to an entire team to help you thrive.
Am I Expanding Globally?
Every company that expands globally runs through some unforeseen hurdles. There are local regulations and laws that you’ll have to ensure that you follow.
Hiring an in-house team member might not be the wisest choice in this scenario. Not only is it cutting into your expansion budget, but you might be breaking the rules.
A global professional employer organization can help you grow your international team. They offer recruitment services to assist you in growing an unstoppable global workforce. They can help you design an onboarding process that’s ethical and gets the results you need.
What’s My Budget?
Every brave business venture should be supported and celebrated by your company. That said, you should always have one eye on your expansion budget.
While hiring an in-house employee can give you exclusivity to their services, you should consider two goals with finding new talent:
- Where can you find the most experience possible?
- How can you hire more people at a reasonable price?
PEOs give you access to their talented employees. No matter what services or tasks you need to be performed, they’ll have a team member (or several) that can help your company thrive. That way, you can focus on big projects.
Use These New Employee Hiring Tips to Your Advantage
Now that you have seen an in-depth guide on the cost of hiring a new employee, be sure to use this information to your advantage.
Take the time to browse our website for more articles on hiring a new employee, as well as many other topics you will find helpful.