The Cost of Hiring a New Employee Could be as Much as $7,645 Per Recruit, Report Says

The Cost of Hiring a New Employee in 2018: $7,645

Did you know the cost of hiring a new employee can be as much as $7,645? In his exploration of the costs associated with hiring and training new recruits, Amr Ibrahim, CEO of ULTATEL, a telecom solutions provider, cites an Industrial Distribution report titled ‘Distribution Hiring Process: The $7,645 Letter’. The report claims that in the quest to recruit, screen and train new employees, small to medium sized businesses can spend as much as $7,645 per new recruit.

The Cost of Hiring a New Employee in 2018

For many small businesses and startups that struggle with cashflow but need new employees to stay on top of business operations and to ultimately help them grow, spending as much as $7,645 sourcing, recruiting and training new members of staff, is quite a burden.

“The productivity of new employees doesn’t match the time and effort spent by companies searching for the right talent. While training and careful recruiting are important, business owners must boost efficiency among new employees in order for them to properly organize, delegate tasks and meet company goals,”  Ibrahim commented in a press statement.

Fortunately, the heavy costs involved in recruiting new can be significantly reduced through various strategies and steps.

Offering remote work to employees can have multiple benefits on small businesses struggling with the expenses of taking on new staff. Not only does letting members of your team work from home help increase productivity and morale, but it can mean you make considerable savings on expensive office leases.

As the Telework Coalition’s ‘Wired Working as a Lifestyle’ report found, businesses save an average of $20,000 a year for each full-time employee who works remotely.

The same report pointed to how, by encouraging high staff morale, remote working reduces employee turnover by as much as 50%. Without the need to keep recruiting new staff, by creating high employee retention rates remote working helps businesses save on the expense of sourcing and training new recruits.

Ibrahim also points to how businesses can save money on the recruitment and training process by training new members of staff remotely through the use of innovative telecommuting technology.

By using the likes of VoIP systems, which enable you to make calls over the internet rather than over a traditional phone network, businesses can carry out comprehensive and quality job training remotely for significantly less costs.

The ULTATEL CEO cites research from Atlantech Online, titled ‘How Much Does a Phone System Cost for Small Business?’, which shows introducing VoIP systems opposed to relying on traditional PBX setups, means businesses can save as much as 40 – 80% on monthly costs and up to $1,000 on individual handsets alone.

The takeaway from Amr Ibrahim’s breakdown of the costs involved in hiring new recruits is that while taking fresh pairs of hands can be expensive for a small business, it is necessary in order to promote company growth, and by encouraging remote work and implementing quality telecommuting systems like VoIP, recruitment costs and training can be significantly reduced.

Photo via Shutterstock


Gabrielle Pickard-Whitehead Gabrielle Pickard-Whitehead is a professional freelance writer and journalist based in the United Kingdom. Since 2006, Gabrielle has been writing articles, blogs and news pieces for a diverse range of publications and sites. You can read "Gabrielle’s blog here.".

3 Reactions
  1. Woah! That’s a huge cost! Thanks for this useful article, Gabrielle. Very informative!

  2. Yes. Especially if there are some tasks that becomes undone simply because an employee left. You should have contingencies for this.