5 Hidden Costs Of Hiring Staff


Thinking of taking on employees? Hiring staff is essential for many businesses, but it’s also one of the biggest overheads – if not the biggest. Most of us will budget for the cost of wages, but may not think to budget for other hidden employee expenses along the way. Here are just a few of those hidden costs so that you can financially prepare yourself. 

Recruitment 

Finding the staff to begin with costs money. You need to first advertise the job, which may involve paying to use job listing sites. You can also go through a recruitment agency. Whilst there are free methods of advertising for jobs, paid services may open you up to a wider audience. The more people that apply, the more choice you have and the more chance you have of finding the ideal candidate. Hiring the wrong person after all can be more costly in the long run

Training 

In some occupations, thorough training may be needed. This could involve signing someone up to a course to get a license or budgeting for wastage. Skimping out on training could result in costly mistakes, so make sure you can dedicate the time and money to this. 

Insurance 

Becoming an employer means having to pay obligatory Employer Liability Insurance. This covers you if any of your employees get sick or injured as a result of work. You may want to take out other optional insurance schemes such as professional indemnity insurance (covers malpractice lawsuits made against employees by customers) and vehicle insurance (if your employees have to drive a company vehicle). 

Absence pay 

You’re also obliged to pay for your employees’ absence, which includes holiday pay, statutory sick pay and maternity pay. 

Every employer must give a minimum holiday entitlement. Staff don’t have to take their paid holiday. Sick pay meanwhile has to be paid for up to 28 weeks in most cases. This article outlines everything your sickness absence policy should include

Keeping a clear record of everyone’s available holiday and time off sick can help to ensure that your employees aren’t taking unnecessary time off and that you’re paying the right amount. There are HR tools that can help to make this easier, automatically calculating how much holiday or sickness absence someone has off. 

Employee incentives 

Employee incentives are optional but will motivate your employees and ensure they stay. These could include monetary bonuses for going the extra mile. Many employees will try to set targets such a certain amount of sales or improving one’s score on an audit that can be rewarded with a monetary bonus. 

Other incentives may be smaller but could still make an impact. These could include taking out employees for a meal on occasion, providing a Christmas party, providing snacks or a coffee machine in the office, paying for employees to learn extra skills or employee discounts on services. You can even provide a physical incentive such as a company car, a work phone or something as small as a bottle of champagne as a reward.

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