Your workforce is your greatest asset and your greatest expense. But how great, exactly, is that expense?
Consider this scenario:
Dennis is the owner of a letterpress printing company with nearly 30 employees.
His office manager resigns and he soon begins looking for a replacement.
He interviews Lina and she seems to be perfect for the job.
He sends her an offer letter and she quickly accepts the position at a yearly salary of $50,000. “Not bad,” he thinks, “that’s in the budget!”
What Dennis needs to consider is that Lina’s yearly compensation is really closer to $70,000, once taxes, benefits, office space, equipment, recruitment costs and more, are factored in.
With each hire you must assume that the true cost of that employee is about 1.4 times more than their base salary.
Prepare a Total Compensation Statement
To determine the true impact an employee has on your bottom line, you need to outline the complete pay package awarded to an employee on an annual basis. Each total compensation statement should include both direct (base salary and/or incentive pay) and indirect compensation (non-monetary benefits such as health and life insurance, wellness rewards, social security contributions, employee assistance programs, etc.) This information is not only helpful for planning and budgeting, by sharing it with candidates and new hires, it can aid in your recruitment and retention efforts.
Protect Your Investment
If you’re going to spend this much money on each employee, you need to ensure you are hiring the right people. If you lack a dedicated human resources professional, or have an over-stressed HR team, it may be in your best interest to outsource this responsibility.
With BPHR, Balance Point’s HR consulting service, a dedicated HR Generalist will fully integrate within your organization to help with every aspect related to recruiting, hiring, and retaining good talent, including:
- Job description review and creation
- Applicant screening/background checks
- Interview process
- Offer letter template
- Employee relations and issue resolution
- Coaching and training
- Company culture rebranding
Learn more about the service here.