It’s certainly not a secret that hiring a new employee isn’t a cheap process. In fact, the U.S. Bureau of Labor Statistics estimates that the average direct cost a company for a new employee, not including training, is $57, 968. Companies trying to minimize overhead spend an average of 20 percent more than planned for when starting their search.
How to Effectively Minimize Overhead
When you’re trying to cut costs it may seem like a good idea to hire professionals without a lot of experience, who are willing to work for much lower salaries than current employees, but it’s not. Instead, use these two methods to cut down on overhead expenses:
- Spend Money on Higher Qualified Professionals: Sometimes you have to spend a little money up front, to save in the long run. Narrow your search to include only the most qualified candidates. While you will need to pay a higher salary to these workers, they’ll be worth every penny. A seasoned professional with the skills and experience your company needs can do the work of several entry-level employees combined. If you pay the person a competitive salary, they’ll be satisfied and won’t quit their job for a better offer in a few months.
- Reduce Head Count: As noted above, one great employee can do the work of several inexperienced or mediocre professionals. You can accomplish the same or even better standards with a small team of dedicated, knowledgeable employees, than with a large staff filled with people who have only limited experience.
The High Costs of a Bad Hire
Not taking the time to hire a strong worker can be a costly mistake for your company. Even if the person was hired at a lower salary, to reduce overhead costs, you’re not going to save any money if they don’t serve as a productive member of the team.
Some of the costs of a bad hire include:
- Lost productivity
- High error rates
- Negative customer impact
- Lower revenues
Need help developing a plan to reduce overhead at your company? Let Conexus assist you in creating a plan to cut costs. Our executive financial recruiting team will work with you to understand the goals of your business and help you to make them happen. If you are looking for executive recruiters in Los Angeles, contact us today.