Hiring the right people always pays off for businesses, but great employees come at a price. The question is, what might it cost to hire a new employee in today’s economy?
According to a Bureau of Labor Statistics (BLS) report, four occupations that paid the highest annual wages in 2014 were general and operations managers ($97,270), software application developers ($95,510), registered nurses ($66,640), and accountants and auditors ($65,940).
The report expects healthcare occupations and industries to have the fastest employment growth and add the most number of jobs between 2014 and 2024.
In general, these high-paying occupations require higher levels of education.
What Does it Cost to Hire a New Employee Today?
Recruiting a new person is an important decision that needs to be taken seriously. This is especially important when you own a small business and operate on a limited budget.
You must keep in mind that employment costs and average salary in the U.S. generally fall into several broad categories. Some of these include recruiting expenses, basic salary, benefits, space and employment taxes.
Eric Koester of MyHighTechStart-Up tells Investopedia, “Estimates range from 1.5x to 3x of salary for the ‘fully-baked’ cost of an employee — the cost including things like benefits, taxes, equipment, training, rent, etc.”
Importance of Hiring Qualified People
The BLS report has highlighted the typical education needed to enter the highest paying occupations. A Bachelor’s degree is the bare minimum for entry into the four top paying occupations.
For businesses, employees with the right education bring value to drive their organization’s success. Not surprisingly, a study by CareerBuilder.com has found that 65 percent of employers said they planned to hire recent college graduates in 2015.
Keeping in mind the competitive nature of business today, it’s not difficult to understand why education matters when businesses hire people. A competent staff with the right education background needs less training and time to get started.
It’s also worth noting that employees with the right education background have the theoretical knowledge that can benefit businesses.
Businesses Should Focus on the Hiring Process
Small businesses today cannot afford to overlook the importance of a competent workforce. It is, therefore, important to streamline the hiring process and get the right people.
To begin with, businesses should invest enough time and resources to understand the skills they will most benefit from. The appropriate salary range should then be based on the value an employee brings to the table.
While determining the salary range, it is important to look at additional investments that need to be made for training, travel and more. A clearly defined strategy can help businesses meet the average salary expectations and get the right people on board.
Image: Bureau of Labor Statistics