How to Save on Hiring Costs
Businesses need employees to function, but sometimes you can’t afford to hire a permanent staff member. Think about using a temporary staffing agency. There are hidden costs involved in hiring employees over and above the salary of the employee.
Hire Temporary Help During Busy Seasons
If your business is seasonal, avoid unemployment costs associated with terminating employees by using a supplementary workforce of temporary employees. The cost of using temp help is lower than the cost of acquiring new employees frequently. You will also save on costs associated with payroll, employer taxes, insurance, help wanted ads and recruitment. Contact and compare prices of different temp services in your area.
Also, you may not need a permanent employee if you have seasonal work that will require 100 people for one day or need an employee to cover sick or vacation leave while someone is out.
Employment agency services:
Review of applications/ resumes
Interviewing and screening
Computerized skill testing
Drug screening and physicals
Reduction of employee turnover
Make sure to consider the hidden costs of employees
In addition to the base salary of an employee, there are additional expenses that can impact the total cost of hiring staff. When factoring the total cost of a new employee, you need to add employer payroll taxes which are comprised of Social Security Tax (currently 6.2%), Medicare (currently 1.45%), Federal Unemployment Tax (currently 0.6%) and State Unemployment Tax (Varies – determined by state). Mileage or travel reimbursements, health insurance premiums, uniforms, stock options, payroll processing and even a small weekly direct deposit fee can all be additional costs when hiring staff. A new employee will also require a workspace and office supplies. Your business will need employees to function, but take all of these fees into consideration before deciding what you can afford to offer for a base salary and whether a position should be full time or part time.
Temp Agencies Take Care of Payroll
Employer match taxes
Federal & State tax filing
Workers’ Compensation Insurance
Legal Fees Associated With Hiring
Wrongful termination / discrimination suits
Worker’s compensation claims & litigation
Federal and State regulation compliance