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Hiring Has Some Hidden Costs…


Hiring an employee doesn’t seem like a grand ordeal. Sure, it’s taxing trying to find the right candidate. You have to review resume after resume, attend interview after interview, and JUST when you think you’ve found the perfect match for the position, that candidate gets scooped up by another company. Okay, so it is a grand ordeal. Hiring isn’t fun. But in all the chaos of the recruiting and hiring process, we tend to forget about other things, such as the costs involved. Even worse, we don’t always notice the ADDITIONAL costs we accumulate throughout this exhausting process; those hidden costs that aren’t nearly as obvious as the bill we owe the 3rd party recruiter, or the sign-on bonus we agree to pay the new hire.

So, here are a couple points to be aware of after a position goes vacant - Or I should say, here’s some motivation to lower your company’s turnover rate:

New hires need to be interviewed & trained, which costs time AND money (Merhar, 2016):

While candidates are being interviewed, the interviewer is not attending to their responsibilities. While new employees are being shown the ropes, that’s time the trainer is spending away from their duties. So, there is a loss of productivity that the company will eventually feel in missed deadlines, lower sales, sloppy work, etc. In addition, some positions require more formal training programs or certifications, either for compliance purposes or because it’s required for the position. These, too, add up.

The company’s revenue could be impacted (Merhar, 2016):

                New hires don’t always “hit the ground running.” They take longer to complete tasks, they make more mistakes, and they haven’t learned the best practices for that role yet. For instance, in customer service or sales positions, it takes time to learn all of the company policies, the products being sold, the tricks used to boost each sale, and so on. It will also be more difficult for them to effectively handle customer issues, which could result in losing that customer if they ultimately have a bad experience.

The true cost of hiring new employees varies from source to source, but a couple agree that it is dependent on the average salary for the position being filled. The higher the previous incumbent’s salary, the higher the cost to replace them (Merhar, 2016; Kantor, 2016). Mueller (2011) even states that an $8/hour employee could cost up to $3500 to replace.

High turnover can be reduced, and hiring costs can be decreased. It’s time to get creative!

Merhar, C. (2016, February 4). Employee retention – the real cost of losing an employee. Retrieved from

Kantor, J. (2016, February 11). High turnover costs way more than you think. Retrieved from

Mueller, A. (2011, July 25). The cost of hiring a new employee. Retrieved from