Recruitment an Expensive business

Recruitment an Expensive business
30 July 2019


•It should be noted that the costs of time and lost productivity in hiring a wrong employee can easily reach 150% of the employee’s annual compensation figure.


•Some of the main factors you and organizations need to consider when calculating the cost of recruitment are :

Departing Employee

  • Temporary cover for vacant post and lower productivity
  • Administration costs for departing employee – payroll, pensions, etc.
  • Lost skills and investment in training
  • Loss od goodwill from customers
  • Possible downturn in morale of remaining employees

Recruitment and selection

  • Manager’s time spent analysing the vacancy and specifying the job
  • Time spent in briefing/working with external agencies
  • Direct costs of working with external agencies
  • Direct advertising costs
  • Administration costs – sending out job information, letters, arranging selection events, etc.
  • Manager’s time – shortlisting, interviewing, selection, taking up references
  • Training costs – ensuring everyone has the necessary skills to recruit

New employee

  • Induction and job skills training
  • Manager/employee’s time spent in orienting new person
  • Administration costs of new employee – payroll, pensions, etc
  • Cost of the new employee being less than 100 per cent productive for weeks/months
  • Disruption to the department as the new person gets up to speed
  • Cost of any new equipment such as company car, mobile phone, laptop, etc.


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