{"id":924,"date":"2024-07-19T11:42:48","date_gmt":"2024-07-19T11:42:48","guid":{"rendered":"http:\/\/staging.www.hundred5.com\/uncategorized\/cost-of-hiring-an-employee\/"},"modified":"2026-01-27T14:35:10","modified_gmt":"2026-01-27T14:35:10","slug":"cost-of-hiring-an-employee","status":"publish","type":"post","link":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee","title":{"rendered":"The True Cost of Hiring an Employee in 2024"},"content":{"rendered":"\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Fact: Hiring costs are steep. Between employee wage and payroll taxes on one side and recruiting costs on the other, even small businesses can end up spending five figures per new employee.&nbsp;Ultra-low unemployment rates, coupled with an aging workforce and greater affinity for independent work, have also been driving hiring costs up year over year.&nbsp;<\/span><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The average cost per hire was $4,129 in 2019 but rose to $4,700 in 2023, which is a 14% increase.&nbsp;<\/span><\/p>\n<cite><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The Society for Human Resource Management (SHRM)<\/span><\/span><\/cite><\/blockquote>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">In reality, however, the cost of hiring an employee can be <\/span><em><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">much<\/span><\/em><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> higher for certain positions currently experiencing high talent shortages \u2014 think cybersecurity, engineering, or nursing. Likewise, the average cost per hire for an executive position is $28,329!<\/span><\/p>\n\n\n\n<p>So&#8230;what&#8217;s the <em>real<\/em> cost of hiring an employee these days? We&#8217;ve crunched some numbers and sourced statistics to help<span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> you estimate the true cost of hiring an employee for your company in 2024. First, we&#8217;ll walk you through some costs to consider, and then we\u2019ll look at how to tie those costs together and optimize your total investment.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">TL;DR \u2014 Key Takeaways<\/span><\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The standard formula for calculating the total cost of an employee is <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">(external recruiting costs + internal costs) divided by the number of hires = CPH.<\/span><\/strong><\/p><\/li>\n\n\n\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">External recruiting costs include all <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">spending on talent acquisition contractors, staffing agencies, or other external service providers<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> that help you fill in open positions.&nbsp;<\/span><\/p><\/li>\n\n\n\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Internal recruiting costs include maintaining your HR function and everything you spend during your hiring process <\/span>\u2014 <strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">job ads, hiring events, HR software, pre-employment assessments, and other admin activities.&nbsp;<\/span><\/strong><\/p><\/li>\n\n\n\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">To estimate the true cost of a new employee, you <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">should also factor in the employee&#8217;s wages, payroll taxes, benefits, bonuses, and other corporate perks. <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">These give you a more comprehensive cost.&nbsp;<\/span><\/p><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Apart from the hard, quantifiable hiring costs, you should also <\/span><span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\">consider&nbsp;<strong>soft costs<\/strong>\u2014<strong>direct and indirect expenses companies incur when hiring new employees<\/strong>. These can include the initial loss of productivity when a new team member arrives and<\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> management time spent on employee orientation and training.&nbsp;<\/span><\/p><\/li>\n\n\n\n<li><p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Factors like <\/span><\/strong><span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\"><strong>hiring speed and quality of new hires&nbsp;<\/strong>will also directly affect the cost-per-hire metric. So does the extra time hiring managers spend on resume reviews and interviews<\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">. Look to streamline these processes to maintain leaner costs.<\/span><\/p><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Hard vs. soft recruitment costs<\/span><\/h2>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The total cost of hiring new employees includes <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">both hard and soft factors<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The hard costs of hiring include the unavoidable costs of talent sourcing, selection, and onboarding, which <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">average about <\/span><\/strong><a href=\"https:\/\/www.shrm.org\/resourcesandtools\/hr-topics\/talent-acquisition\/pages\/the-real-costs-of-recruitment.aspx\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>$4,700 per employee<\/u><\/span><\/strong><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;You should also factor in the extra costs of running your HR department and total workers&#8217; compensation.&nbsp;<\/span><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">&#8220;Of the [total recruitment] costs, I would say 30 percent to 40 percent are hard costs, and the other 60 percent are soft costs.&#8221;<\/span><\/p>\n<cite><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Edie Goldberg, SHRM Foundation chair-elect and co-author of the book The Inside Gig<\/span><\/cite><\/blockquote>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Soft <a class=\"wpil_keyword_link\" href=\"https:\/\/toggl.com\/blog\/calculating-recruitment-costs\" title=\"recruitment costs\" data-wpil-keyword-link=\"linked\">recruitment costs<\/a> are direct and indirect expenses companies incur when bringing new team members on board. These include time on new employee support, onboarding efforts from the internal HR team, and lost productivity of all people involved in coaching the new hire.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Soft recruitment costs are harder to quantify, but they <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">can increase the true cost of hiring by 2X to 3X times, both for a full-time and a part-time employee.<\/span><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Hard Costs<\/strong>: <em>Easy-to-quantify, direct costs coming out of your hiring budget (e.g., training costs)<\/em><\/td><td><strong>Soft Costs<\/strong>: <em>Ancillary, indirect spending of corporate resources (e.g., the learning curve of new hires)<\/em><\/td><\/tr><tr><td>Recruitment costs (HR salaries, premium job boards, social media ads, etc.)&nbsp;<em><\/em><\/td><td>Managerial time spent on recruitment, interviewing, and training&nbsp;<\/td><\/tr><tr><td>HR software (ATS, skills assessment tools, onboarding apps, people management platforms, etc.).&nbsp;<\/td><td>Impact on communication dynamics and team synergy<\/td><\/tr><tr><td>Compensation (employee wages, benefits, bonuses, perks, payroll taxes)&nbsp;<\/td><td>Knowledge transfer from current employees to a new hire<\/td><\/tr><tr><td>Onboarding (structured training, welcome kits, new equipment, etc.)&nbsp;<\/td><td>Initial loss of productivity during the adaptation period&nbsp;<\/td><\/tr><tr><td>Miscellaneous admin costs (interview scheduling, background checks, legal contracts, etc.)&nbsp;<\/td><td>Organizational disruption during onboarding and the training period<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Use this table to help categorize soft and hard recruiting costs.<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">7 most common recruitment cost drivers&nbsp;<\/span><\/strong><\/h2>\n\n\n\n<p>To understand your total recruitment costs and have a more accurate overview of your cost to hire, it&#8217;s helpful to understand the<span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> most common hiring costs across any industry. Each of these contributes to the overall cost of hiring a new employee.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">1. External hiring team\/recruitment partner costs<\/span><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Human resources is one of the <\/span><a href=\"https:\/\/www2.deloitte.com\/content\/dam\/Deloitte\/ie\/Documents\/Consulting\/ie-consulting-2023-global-shared-services-and-outsourcing-survey.pdf\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>top three most outsourced business functions<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">, alongside finance and IT.&nbsp;This is typically because, for many companies, having an internal HR team doesn\u2019t make economic sense.<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Different <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>types of recruiters<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">, staffing agencies, payroll specialists, and digital startups offer competitive performance-driven pricing for hiring an employee.<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Outsourcing recruitment processes makes perfect sense when you:<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u2705 Have limited internal HR resources (or none at all) and need to hire for specialized roles<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u2705 Experience a period of rapid expansion and want to <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>mass hire high-quality candidates fast<\/u><\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u2705 Hire occasionally (fewer than ten people annually) and don\u2019t want to shoulder the overhead costs of full-time employees<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u2705 Plan to hire on-site, hybrid, or remote workers internationally and don\u2019t know the specifics of local labor markets or how to manage an international employee&#8217;s wages<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u2705 Need seasonal workers and want to have more hands on deck during busy periods (e.g., before Christmas)<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u2705 Struggle to source senior or executive-level candidates for mission-critical positions and lack industry connections<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u2705 Would rather focus on core business functions as a small business owner, instead of hiring employees<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">An external recruiter (or an agency) brings extra expertise to your hiring process and, oftentimes, access to a <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>unique talent pool<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;For smaller companies, external recruitment partners help free up internal resources. For larger enterprises, agencies bring extra speed, flexibility, and cost-efficiency into the hiring process.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Cost-wise, recruiting process outsourcing (RPO) can be<\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> 1.6x cheaper <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">than maintaining a large internal talent acquisition team \u2014&nbsp; <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/f.hubspotusercontent10.net\/hubfs\/6664312\/PDFs\/SciBio-Whitepaper-CostPerHire.pdf\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>$311,220 vs $525,480<\/u><\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> annually<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Here\u2019s how the cost per hire differs by fulfillment method, according to <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/f.hubspotusercontent10.net\/hubfs\/6664312\/PDFs\/SciBio-Whitepaper-CostPerHire.pdf\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>SciBio<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">:&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udcb0 External contract recruiter: <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">$10,736&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udcb0 Internal TA team: <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">$14,318<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udcb0 RPO firm:<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> $8,961<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">On average, <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">budget anywhere between <\/span><\/strong><a href=\"https:\/\/www.hiringpeople.co.uk\/blog\/how-much-do-recruitment-agencies-charge\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>15 to 25%<\/u><\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> of the employee\u2019s annual salary for external recruiting costs<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;Depending on the employee\u2019s salary range, this is how much you could be paying a recruitment agency:<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Employee Base Salary<\/strong><\/td><td><strong>15%<\/strong><\/td><td><strong>20%<\/strong><\/td><td><strong>25%<\/strong><\/td><\/tr><tr><td>$20,000<\/td><td>$3,000<\/td><td>$4,000<\/td><td>$5,000<\/td><\/tr><tr><td>$30,000<\/td><td>$4,500<\/td><td>$6,000<\/td><td>$7,500<\/td><\/tr><tr><td>$50,000<\/td><td>$7,500<\/td><td>$10,000<\/td><td>$12,500<\/td><\/tr><tr><td>$70,000<\/td><td>$10,500<\/td><td>$14,00<\/td><td>$17,500<\/td><\/tr><tr><td>$100,000<\/td><td>$15,000<\/td><td>$20,000<\/td><td>$25,000<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Use this table to help calculate the cost of hiring a recruitment agency.<\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">2. Internal HR team<\/span><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Having an internal recruitment team makes perfect sense for mid-to-larger organizations.&nbsp;However, an internal team comes at a price. At a minimum, you\u2019ll have at least one HR manager to oversee the hiring process. Salaries differ across the board, but general estimates are anywhere from <\/span><a href=\"https:\/\/www.salary.com\/research\/salary\/benchmark\/human-resources-manager-salary\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>$106,958 and $135,440<\/u><\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> in the US and <\/span><\/strong><a href=\"https:\/\/www.salary.com\/research\/fr-salary\/benchmark\/human-resources-manager-salary\/fr\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>\u20ac75,370<\/u><\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> to <\/span><\/strong><a href=\"https:\/\/www.glassdoor.com\/Salaries\/germany-human-resources-manager-europe-salary-SRCH_IL.0,7_IN96_KO8,38.htm\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>\u20ac105,000<\/u><\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> across Europe<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.<\/span><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Getting assistance with hiring from an in-house talent acquisition employee will save 15 hours of total management-time-per-hire (MTPH) and approximately \u20ac880 in management costs when hiring new employees<\/span>.<\/p>\n<cite><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Recruiters.ie&nbsp;<\/span><\/cite><\/blockquote>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">An HR manager runs the entire <\/span><a href=\"https:\/\/toggl.com\/blog\/full-recruitment-cycle\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>recruitment cycle<\/u><\/span><\/a><span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\"><a href=\"https:\/\/toggl.com\/blog\/full-recruitment-cycle\" target=\"_blank\" rel=\"noopener\"><u>,<\/u><\/a>&nbsp;from creating a&nbsp;<a href=\"https:\/\/toggl.com\/blog\/job-description-examples\" target=\"_blank\" rel=\"noopener\">job description<\/a>&nbsp;and promoting it on<a href=\"https:\/\/toggl.com\/blog\/make-job-ad-that-attracts-candidates\" target=\"_blank\" rel=\"noopener\">&nbsp;<u>job boards<\/u><\/a>&nbsp;to candidate screening, sourcing, and shortlisting. Of course, the HR manager also handles other talent management processes, including&nbsp;employee onboarding, retention, and professional development<\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Larger organizations have several talent acquisition (TA) specialists helping the HR manager with recruitment and <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>employer branding activities<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">. Talent acquisition specialists mostly focus on <a class=\"wpil_keyword_link\" href=\"https:\/\/toggl.com\/blog\/creative-sourcing-strategies\" target=\"_blank\" rel=\"noopener\" title=\"candidate sourcing\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"679\">candidate sourcing<\/a> and pre-employment screening.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The biggest expenses for operating an internal talent team like this include:&nbsp;<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Salaries, payroll taxes, benefits, and bonuses<\/span><\/p><\/li>\n\n\n\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Professional development and training cost<\/span><\/p><\/li>\n\n\n\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Recruitment advertising expenses&nbsp;<\/span><\/p><\/li>\n\n\n\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Employer branding activities&nbsp;<\/span><\/p><\/li>\n\n\n\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Hiring tools and software platforms&nbsp;<\/span><\/p><\/li>\n\n\n\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Employee overhead costs&nbsp;<\/span><\/p><\/li>\n\n\n\n<li><p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Compliance and legal costs&nbsp;<\/span><\/p><\/li>\n<\/ul>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">While this might seem like a lot of cash just to attract a new hire, these expenses translate to multiple benefits, including the cost-efficiency of high-volume recruiting (compared to an external recruiter), improved candidate experience, better internal talent knowledge, and greater control and customization of <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>recruiting plans<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">To calculate the cost of hiring employees with an internal team, run the following calculation:&nbsp;<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Estimate the TA specialists\u2019s hourly rate.<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> For example, a \u20ac55,000 annual salary breaks down to \u20ac25\/hour.&nbsp;<\/span><\/p><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Determine how much time a TA specialist spends<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> on sourcing a new employee. For example, maybe one person spends 30 hours on average, or \u20ac750 total (using the \u20ac25\/hour estimate) when hiring an employee, and your HR manager spends 15 hours at \u20ac50\/hour for a total of \u20ac500.&nbsp;<\/span><\/p><\/li>\n\n\n\n<li><p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Factor in extra overheads,<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> including advertising costs, per-user software licenses, premium memberships, etc. For this example, we&#8217;ll total this up to an additional \u20ac500.&nbsp;<\/span><\/p><\/li>\n\n\n\n<li><p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Add everything up. <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The cost per hire in this scenario will be \u20ac750 + \u20ac500 + \u20ac500 = \u20ac1750.<\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">&nbsp;<\/span><\/strong><\/p><\/li>\n<\/ul>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The above calculation is far from perfect. You may also incur additional costs such as employer taxes and benefits, performance-based bonuses, or spending on <\/span><a href=\"https:\/\/toggl.com\/blog\/recruitment-campaign-ideas\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>creative recruitment marketing activities<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp; Check the latest industry benchmarks for more accurate cost estimates.&nbsp;<\/span><\/p>\n\n\n        <div class=\"mb-8 top-tip\">\n            \n                            <span class=\"flex items-center text-dark-purple-100 opacity-60 uppercase mb-2 text-sm font-bold\">\n                    <img decoding=\"async\" class=\"!w-6 !h-6 !object-contain mr-2\" src=\"https:\/\/toggl.com\/blog\/wp-content\/themes\/toggl-mjtweaver\/img\/brain.png\" alt=\"Top tips to enlarge those brains\" aria-label=\"Top tips to enlarge those brains\" width=\"24\" height=\"24\" loading=\"lazy\">    \n                    <span>Top tip:<\/span>\n                <\/span>\n            \n            <div class=\"bg-yellow-30 border-t-[3px] border-yellow-100 px-6 pt-6 pb-2\"><p>The <a href=\"https:\/\/toggl.com\/blog\/recruiting-metrics\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\"><u>cost-per-hire recruiting metric<\/u><\/span><\/a><span data-color=\"transparent\"> is directly connected with time-to-hire. The longer it takes to fill an open vacancy, the higher your internal recruiting costs will be. To keep both numbers in check, look for opportunities to optimize your recruitment process \u2014 introduce extra <\/span><a href=\"https:\/\/toggl.com\/blog\/recruitment-technology-tools\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\"><u>HR technology<\/u><\/span><\/a><span data-color=\"transparent\"> or <\/span><a href=\"https:\/\/toggl.com\/blog\/creative-sourcing-strategies\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\"><u>experiment with new sourcing strategies<\/u><\/span><\/a><span data-color=\"transparent\">.<\/span><\/p>\n<\/div>\n        <\/div>\n    \n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">3. Talent sourcing costs<\/span><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Talent sourcing costs include everything companies spend to attract top talent to open positions.<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Job board fees are an almost unavoidable hiring cost (unless you\u2019re prioritizing other strategies like <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>campus recruiting<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> or direct head-hunting). Popular platforms like Indeed and LinkedIn have a pay-per-click model, where you get billed for each click on your job posting. Others charge a flat subscription fee per month.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Here are some <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">price ranges from general and specialized job boards<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">:&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u27a1\ufe0f LinkedIn: <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">$1.20 to $1.50 per click on your job ad, depending on the job title, location, and competition<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u27a1\ufe0f Indeed: <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Between $0.10 to $5 per click on a promoted job post, but you can set a capped daily\/monthly budget<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u27a1\ufe0f We Work Remotely: <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">From $299 per month for one post<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\u27a1\ufe0f Wellfound: <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">This platform has a freemium plan, with extra recruiting features available from $499\/month&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">To attract a <\/span><span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\">higher caliber of applicants,&nbsp;<strong>prioritize niche job boards<\/strong>. For example,&nbsp;<a href=\"https:\/\/remotive.com\/\" target=\"_blank\" rel=\"noopener\"><u>Remotive<\/u><\/a>&nbsp;attracts many<\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> tech workers, while <\/span><a href=\"https:\/\/www.mediabistro.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>Mediabistro<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> is the place to look for creative talent (designers, journalists, marketers, etc.).&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">If you\u2019re open to hiring remotely or want to <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/toggl.com\/blog\/how-to-hire-a-freelancer\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">hire a freelancer<\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">, you can also consider talent matchmaking platforms. Startups like <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/arc.dev\/\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>Arc<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> and <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>Talent.io<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> promise to match you with vetted development talent (for a higher fee, of course!).<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">You can also explore other <\/span><a href=\"https:\/\/toggl.com\/blog\/recruitment-strategies\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>recruitment strategies<\/u><\/span><\/a>, such as referrals from current employees, internship programs, or creative social media campaigns. Each of these has an associated cost, so ensure you monitor<span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> sourcing cost and efficiency for each channel.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">4. Pre-employment assessments<\/span><\/h3>\n\n\n\n<p><a href=\"https:\/\/toggl.com\/blog\/skills-based-hiring\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>Skills-based hiring<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> is replacing the traditional hiring process, which is rooted in proxy requirements, like completing a college degree or years of experience in the role. Instead, when using <\/span><a href=\"https:\/\/toggl.com\/blog\/talent-assessments\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">talent assessments<\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> to hire an employee, HR managers use skill tests to determine the candidate\u2019s <\/span><em><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">actual <\/span><\/em><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">competency.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Over <\/span><a href=\"https:\/\/shrm.org\/foundation\/about\/Documents\/The%20Rise%20Of%20Alternative%20Credentials%20In%20Hiring.pdf?_ga=2.232068895.1070606511.1662146356-884467718.1662146356\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>half of employers<\/u><\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> now use pre-hiring employment tests to pre-screen candidates and benefit from faster, less biased, and more data-driven decision-making<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;This is because <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>pre-employment assessments<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> offer a standardized way to evaluate the applicants\u2019 competencies and cognitive abilities.<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Effective skills tests can be role-specific<\/span><span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\">, skill-specific, or even aimed at <a href=\"https:\/\/toggl.com\/blog\/soft-skills-assessment-test\" target=\"_blank\" rel=\"noopener\"><u>assessing a specific soft skill<\/u><\/a>\u00a0. However, like any other recruitment tool, these come at an extra cost \u2014 <strong>anywhere between $20 and $500+<\/strong><\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> per seat per month.\u00a0<\/span><\/strong><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">When considering <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/toggl.com\/blog\/the-ultimate-list-of-pre-employment-testing-tools-vol-1\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>pre-employment testing tools<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">, pay attention to the following:&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udc4d Relevance. <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">General personality tests are largely situational and don\u2019t predict <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>future job performance<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">, unlike skills-based assessments. General cognitive ability (IQ) tests also don\u2019t offer much insight into the candidate\u2019s experience levels.&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udc4d Test library coverage. <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The best platforms offer pre-made skills tests for a variety of roles, technical competencies, and soft skills.&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udc4d Customization. <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Look for platforms that let you mix and match questions from their test library (plus add your own ones) rather than just provide standardized <a href=\"https:\/\/toggl.com\/blog\/cognitive-ability-tests\" target=\"_blank\" rel=\"noreferrer noopener\">cognitive ability tests<\/a>.&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udc4d Extra features. <\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Many pre-employment assessment platforms also include applicant tracking features, candidate feedback tools, anti-cheating, and smart workflow automation features that save time and money for your team.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">5. Background checks and security clearance<\/span><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Background checks are an unavoidable cost of hiring in certain industries, such as education, finance, and healthcare.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">A standard background check includes verification of education, employment history, and criminal records. <\/span><span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\"><strong>It can cost as little as&nbsp;<\/strong><a href=\"https:\/\/www.shrm.org\/resourcesandtools\/hr-topics\/talent-acquisition\/pages\/reliablebackgroundcheckcost.aspx\" target=\"_blank\" rel=\"noopener\"><u><strong>$10<\/strong><\/u><\/a><strong>&nbsp;or up to&nbsp;<\/strong><a href=\"https:\/\/f.hubspotusercontent10.net\/hubfs\/6664312\/PDFs\/SciBio-Whitepaper-CostPerHire.pdf\" target=\"_blank\" rel=\"noopener\"><u><strong>$2,800<\/strong><\/u><\/a>, depending on how detailed you want it<\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;<\/span><\/p>\n\n\n        <div class=\"mb-8 top-tip\">\n            \n                            <span class=\"flex items-center text-dark-purple-100 opacity-60 uppercase mb-2 text-sm font-bold\">\n                    <img decoding=\"async\" class=\"!w-6 !h-6 !object-contain mr-2\" src=\"https:\/\/toggl.com\/blog\/wp-content\/themes\/toggl-mjtweaver\/img\/brain.png\" alt=\"Top tips to enlarge those brains\" aria-label=\"Top tips to enlarge those brains\" width=\"24\" height=\"24\" loading=\"lazy\">    \n                    <span>Top tip:<\/span>\n                <\/span>\n            \n            <div class=\"bg-yellow-30 border-t-[3px] border-yellow-100 px-6 pt-6 pb-2\"><p><span data-color=\"transparent\">Ensure your checks are legal to avoid getting penalized by federal law! Several laws like <\/span><a href=\"https:\/\/www.ftc.gov\/legal-library\/browse\/statutes\/fair-credit-reporting-act\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\"><u>The Fair Credit Reporting Act (FCRA)<\/u><\/span><\/a><span data-color=\"transparent\"> in the USA and <\/span><a href=\"https:\/\/www.dataguidance.com\/opinion\/eu-processing-personal-data-related-criminal-0\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\"><u>GDPR in the EU countries<\/u><\/span><\/a><span data-color=\"transparent\"> restrict an employer&#8217;s ability to use certain data like credit scores or criminal records for pre-employment screening.\u00a0<\/span><\/p>\n<\/div>\n        <\/div>\n    \n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Jobs in the government and defense sectors may also require specialized security clearances. In the US, for example, over <\/span><a href=\"https:\/\/www.gao.gov\/assets\/gao-23-105812.pdf\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>4 million people<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> hold security clearances from respective authorities.&nbsp;The costs for obtaining respective clearances vary by country. In Australia, the <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">fees range from <\/span><\/strong><a href=\"https:\/\/www.defence.gov.au\/security\/clearances\/about\/security-clearance-fees\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>AUD $442 to AUD $15,280<\/u><\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">. In the US, fees range from <\/span><\/strong><a href=\"https:\/\/news.clearancejobs.com\/2021\/09\/07\/how-much-does-it-cost-to-obtain-a-clearance-fy-2022-23-costs-go-down\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>$140 to $5,410<\/u><\/span><\/strong><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">6. Salary, benefits, and bonuses<\/span><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">As soon as you finish onboarding a new employee, you\u2019ve got to start paying employees&#8217; wages. Depending on your structure, this will mean weekly or monthly wage salaries going forward into the future.<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">New employee costs include:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Annual salary:<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> Base pay plus overtime<\/span><\/p><\/li>\n\n\n\n<li><p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Taxes<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">: Social Security, state unemployment tax<\/span><\/p><\/li>\n\n\n\n<li><p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Benefits<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">: Pension, disability coverage, health coverage<\/span><\/p><\/li>\n\n\n\n<li><p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Bonuses:<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> Both yearly performance and any signing bonus<\/span><\/p><\/li>\n\n\n\n<li><p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Perks:<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> Home office budget, reimbursed training expenses, etc.<\/span><\/p><\/li>\n<\/ul>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">In many countries, employer taxes<\/span>,<span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> and benefits can make up anywhere between 1.25 to 2.5 of the base salary.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">For example, <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">in the US, the cost of hiring a new employee for a base salary of $50,000 is between <\/span><\/strong><a href=\"https:\/\/web.mit.edu\/e-club\/hadzima\/how-much-does-an-employee-cost.html\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>$62,500 to $70,000 per year<\/u><\/span><\/strong><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">. In France, hiring an employee for a \u20ac80.000 salary will cost about <\/span><a href=\"https:\/\/www.eurodev.com\/blog\/costs-of-hiring-european-employees\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>\u20ac116.000<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">. Long term, most employees expect salary bumps, usually in line with your country\u2019s inflation and their <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>professional development plans<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">To improve employee retention, many companies also entice new employees with sign-up and relocation bonuses, premium health insurance coverage, and a plethora of other in-office and remote work bonuses \u2014 from free coffee and catered lunches to tuition reimbursement and mental health services.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">7. Onboarding and training costs<\/span><\/strong><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">True recruitment costs also include money you spend on onboarding a new employee and training them. Onboarding and training costs include:&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udcbb <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Equipment:<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> Laptop, phone, software licenses)<\/span><\/p>\n\n\n\n<p>\ud83d\udcda <strong>Formal training:<\/strong> Diversity training, compliance training, skills development, courses<\/p>\n\n\n\n<p><strong>\ud83d\udcac Employee support:<\/strong> Time that other team members spend supporting new hires<\/p>\n\n\n\n<p><strong>\ud83d\udca5 Productivity costs:<\/strong> <span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Reductions in productivity as the new hire gets up to speed<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">To help you benchmark your progress on the last point, know that<\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> it takes <\/span><\/strong><a href=\"https:\/\/sloanreview.mit.edu\/article\/getting-new-hires-up-to-speed-quickly\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">8 to 26 weeks<\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> for an employee to achieve full productivity<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">. During this time, organizations are essentially losing money as the new employee costs more than they&#8217;re earning for the company.<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The more complex or senior the job, the longer it takes to get familiar. In other words, a new <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/toggl.com\/hire\/test-library\/customer-support-skills-test\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>customer support specialist<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> should start to pay for themselves sooner than a new <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/toggl.com\/hire\/test-library\/product-manager-skills-test\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>senior product manager<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Companies spend <\/span><\/strong><a href=\"https:\/\/joshbersin.com\/2024\/03\/the-340-billion-corporate-learning-industry-is-poised-for-disruption\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">$1,280 per employee<\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> on training annually<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">, with the average cost per hour of training being $103.&nbsp;Total onboarding costs, in turn, run higher as you also need to factor in extra support, loss of productivity, and misc costs on onboarding documents or software.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">On the brighter side<\/span><span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\">, an&nbsp;<strong>effective onboarding process improves new hire retention by 82% and productivity by over 70%<\/strong>, according to&nbsp;<a href=\"https:\/\/b2b-assets.glassdoor.com\/the-true-cost-of-a-bad-hire.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><u>Brandon Hall Group research<\/u><\/a>. So,<\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> it makes the investment worthwhile!<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The total cost of hiring new employees<\/span><\/strong><\/h2>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">To calculate the total cost of hiring a new team member, let\u2019s add up all the common cost areas.&nbsp;Here&#8217;s an example of the total one-off costs of hiring an employee<\/span>.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>HR Manager (80 hours)<\/td><td>$4,400<\/td><\/tr><tr><td>1-month job posting on Monster<\/td><td>$249<\/td><\/tr><tr><td>LinkedIn ads<\/td><td>$100<\/td><\/tr><tr><td>1-month subscription to a recruitment software<\/td><td>$25<\/td><\/tr><tr><td>Basic background check<\/td><td>$50<\/td><\/tr><tr><td>New laptop and business software<\/td><td>$2,500<\/td><\/tr><tr><td>Training courses<\/td><td>$400<\/td><\/tr><tr><td>Employee support (40 hours)<\/td><td>$3,000<\/td><\/tr><tr><td>New employee signing bonus<\/td><td>$2,000<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">A helpful guide for calculating the cost of hiring a new employee in 2024.<\/figcaption><\/figure>\n\n\n\n<p>\ud83e\udd41 <strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Total = $1<\/span>2,724<\/strong><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The actual cost of hiring is steep (although many of these expenses are fully tax deductible \ud83d\ude09), but calculating it gives you a good sense of the real costs of your workforce.<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The exact costs will also differ depending on whether you\u2019re hiring for a junior vs. senior role.&nbsp;Executive hires will not only expect a higher salary range but also more perks and a larger sign-on bonus. But seasoned pros will require less structured training, compared to more junior highers.&nbsp;<\/span><\/p>\n\n\n        <div class=\"mb-8 top-tip\">\n            \n                            <span class=\"flex items-center text-dark-purple-100 opacity-60 uppercase mb-2 text-sm font-bold\">\n                    <img decoding=\"async\" class=\"!w-6 !h-6 !object-contain mr-2\" src=\"https:\/\/toggl.com\/blog\/wp-content\/themes\/toggl-mjtweaver\/img\/brain.png\" alt=\"Top tips to enlarge those brains\" aria-label=\"Top tips to enlarge those brains\" width=\"24\" height=\"24\" loading=\"lazy\">    \n                    <span>Top tip:<\/span>\n                <\/span>\n            \n            <div class=\"bg-yellow-30 border-t-[3px] border-yellow-100 px-6 pt-6 pb-2\"><p><span data-color=\"transparent\">You can also get a better idea of the <strong>cost of hiring an employee in 2024<\/strong> from the following studies:\u00a0<\/span><\/p>\n<p><!-- \/wp:paragraph --> <!-- wp:paragraph --><\/p>\n<ul>\n<li><span data-color=\"transparent\">The <\/span><a href=\"https:\/\/www.shrm.org\/resourcesandtools\/hr-topics\/benefits\/pages\/shrm-hr-benchmarking-reports-launch-as-a-member-exclusive-benefit.aspx\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\"><u>latest benchmark<\/u><\/span><\/a><span data-color=\"transparent\"> the Society for Human Resource Management puts the average cost to hire an employee at $4,700, with around 44 days to fill a position.<\/span><\/li>\n<li><a href=\"https:\/\/media.trustradius.com\/product-downloadables\/JL\/DN\/B8NJRB4HPHM5.pdf\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\"><u>Appcast<\/u><\/span><\/a><span data-color=\"transparent\"> estimated that the average cost per online job application is $28.47, up by 43% compared to 2020. Average recruitment marketing costs were $225 for construction positions (the lowest) and $260 for engineering &amp; science positions (the highest). <\/span><\/li>\n<li>According to the <a href=\"https:\/\/itbrief.com.au\/story\/the-cost-of-hiring-new-workers-doubles-to-more-than-23-000\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\"><u>Australian Human Resources Institute (AHRI)<\/u><\/span><\/a><span data-color=\"transparent\">,<\/span> <span data-color=\"transparent\">the average cost to hire is $23,860 per candidate in the region, with the average time-to-hire being 40 days in Australia and 50 days in New Zealand.<\/span><\/li>\n<li>On average, internal HR teams spend $2,524 per employee annually in miscellaneous costs, with the average HR function expense rate being 0.74% of the company revenue, according to <a href=\"https:\/\/emtemp.gcom.cloud\/ngw\/globalassets\/en\/human-resources\/documents\/hr-budget-benchmarks-2023.pdf?\" target=\"_blank\" rel=\"noopener noreferrer\"><span data-color=\"transparent\"><u>Gartner<\/u><\/span><\/a><span data-color=\"transparent\">.<\/span><\/li>\n<\/ul>\n<\/div>\n        <\/div>\n    \n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Every company strives to have a cost-effective recruitment process.&nbsp;While the money factor is important, it doesn\u2019t tell the whole story when calculating recruitment costs. You\u2019ll have to factor in other tradeoffs, including the following.<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Speed vs. cost<\/span><\/h4>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">An extended <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/toggl.com\/blog\/time-to-fill\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>time-to-fill<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> for open rolls increases both direct and indirect recruiting costs. With this talent acquisition model, HR teams spend more time and money on sourcing new talent, while the company at large experiences a productivity loss.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The average cost of replacing an employee is <\/span><a href=\"https:\/\/www.gallup.com\/workplace\/247391\/fixable-problem-costs-businesses-trillion.aspx\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>1.5X to 2x <\/u><\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">the employee\u2019s annual salary.&nbsp;<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">For a 100-person company with an average employee&#8217;s wage of $50K per year, employee replacement costs can balloon to <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">$660,000 to $2.6 million per year<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">!&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">You can save money in the long run by spending more on closing a job opening faster. For example, by having a bigger job promotion budget to attract high-quality candidates or by <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>using skill assessments to pre-screen applicants faster<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Quality vs. cost<\/span><\/h4>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">It&#8217;s super tempting to focus <\/span><em><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">only<\/span><\/em><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> on reducing your cost-per-hire metric. We get it \u2014 times are tough. But doing so can have a toll on your workforce quality.<\/span><\/p>\n\n\n\n<p><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/toggl.com\/blog\/talent-acquisition\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Talent acquisition<\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> is all about getting <\/span><em><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">great <\/span><\/em><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">people into your business who don\u2019t just have the skills to perform the role but align with your organization\u2019s culture and values.&nbsp;Getting this wrong can cost the company more money further down the line due to a lack of productivity and a slower learning curve.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">average cost of a bad hire is a staggering <\/span><\/strong><a href=\"https:\/\/www.roberthalf.com\/au\/en\/about\/press\/rising-costs-bad-hire\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>15%-21%<\/u><\/span><\/strong><\/a><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> of the employee\u2019s salary<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">, depending on seniority.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">How to calculate recruitment costs in 5 steps&nbsp;<\/span><\/h2>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Now it&#8217;s time to run the numbers yourself! Here\u2019s how to calculate the cost of your new hire step-by-step.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">1. Start with the basic formula<\/span><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">The general <\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">cost-per-hire formula<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> is pretty simple on face value, but a few different variables go into making it work.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">2. Forecast your hiring volumes&nbsp;<\/span><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Evaluate your resourcing profile to estimate your company&#8217;s cost per hire over a longer period (e.g., a quarter).&nbsp;Talk to department leads and hiring managers about their <\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>talent gaps<\/u><\/span><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> and hiring plans for the next year.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Department leads will know the current number of individuals in each team and whether that number will (or should) remain static or is subject to change in the short term. Senior executives will have a more strategic view of the company and be able to provide insight into f<\/span><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">uture growth plans or transformation initiatives that may need extra staff<\/span><\/strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Then, of course, there\u2019s natural <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/toggl.com\/blog\/employees-turnover\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>staff turnover<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">. Hopefully, you\u2019ll have some past data to lean on to understand the natural churn of employees within your organization. If not, the average <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.imercer.com\/articleinsights\/workforce-turnover-trends\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>US turnover rate<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> sits at around 17%.<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">With those areas covered, it works best to plot the number of expected hires by the department in a table. You\u2019ll see an example of this below.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Department<\/strong><\/td><td><strong>Q1<\/strong><\/td><td><strong>Q2<\/strong><\/td><td><strong>Q3<\/strong><\/td><td><strong>Q4<\/strong><\/td><td><strong>Total<\/strong><\/td><\/tr><tr><td>Administrative<\/td><td>1<\/td><td>0<\/td><td>2<\/td><td>1<\/td><td>4<\/td><\/tr><tr><td>Sales<\/td><td>3<\/td><td>3<\/td><td>4<\/td><td>4<\/td><td>14<\/td><\/tr><tr><td>Marketing<\/td><td>2<\/td><td>2<\/td><td>1<\/td><td>1<\/td><td>6<\/td><\/tr><tr><td>Engineering<\/td><td>5<\/td><td>8<\/td><td>10<\/td><td>12<\/td><td>35<\/td><\/tr><tr><td><strong>Total<\/strong><\/td><td><strong>11<\/strong><\/td><td><strong>13<\/strong><\/td><td><strong>17<\/strong><\/td><td><strong>18<\/strong><\/td><td><strong>59<\/strong><\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Total number of expected hires by department.<\/figcaption><\/figure>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Now we have the bottom part of the formula complete!&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">3. Estimate all relevant recruitment costs&nbsp;<\/span><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">You can complete the top row of the formula by bringing together the internal and external recruitment costs.&nbsp;Some of these will be fixed, and some will be variable based on your hiring volumes.<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">For example, the employee\u2019s basic salary or state health insurance contributions will be fixed. But job advertising costs will be incurred incrementally based on the number of vacancies you post.&nbsp;<\/span><\/p>\n\n\n        <div class=\"mb-8 top-tip\">\n            \n                            <span class=\"flex items-center text-dark-purple-100 opacity-60 uppercase mb-2 text-sm font-bold\">\n                    <img decoding=\"async\" class=\"!w-6 !h-6 !object-contain mr-2\" src=\"https:\/\/toggl.com\/blog\/wp-content\/themes\/toggl-mjtweaver\/img\/brain.png\" alt=\"Top tips to enlarge those brains\" aria-label=\"Top tips to enlarge those brains\" width=\"24\" height=\"24\" loading=\"lazy\">    \n                    <span>Top tip:<\/span>\n                <\/span>\n            \n            <div class=\"bg-yellow-30 border-t-[3px] border-yellow-100 px-6 pt-6 pb-2\"><p><span data-color=\"transparent\">Don\u2019t forget to factor in the extra soft recruitment costs!\u00a0This is where many small business owners or newer HR professionals miscalculate recruitment costs, as they forget to factor in things like benefits cost, money spent on onboarding, etc.<\/span><\/p>\n<\/div>\n        <\/div>\n    \n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">4. Do the math<\/span><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Now, let\u2019s run the numbers together for several hiring scenarios.&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udcb0 Hiring budget for small businesses: <\/span><\/strong>$20,000 \/ 5 new hires = $4,000&nbsp;per new hire<\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udcb0 Mass hiring program for college graduates: <\/span><\/strong>$35,000 \/ 10 new hires = $3,500&nbsp;per employee<\/p>\n\n\n\n<p><strong><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">\ud83d\udcb0 Annual enterprise hiring budget (cross-function): <\/span><\/strong>$300,000 \/ 42 = $7,143&nbsp;per employee<\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">If you need deeper insights, segment the total costs and number of hires down by job function. Doing so can help you identify more expensive roles to fill and provide further insights for informing your <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/toggl.com\/blog\/recruitment-strategies\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>recruitment strategy<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">5. Track and monitor your costs&nbsp;<\/span><\/h3>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">Monitor your cost per hire over time alongside other <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/toggl.com\/blog\/recruiting-metrics\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>recruitment metrics<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"> to better understand talent dynamics, identify waste areas,&nbsp;and optimize your recruitment process even further.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">If your costs are continuously increasing, implement cost-effective <\/span><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/toggl.com\/blog\/recruitment-best-practices\"><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\"><u>recruitment best practices<\/u><\/span><\/a><span data-color=\"transparent\" style=\"background-color: transparent;color: inherit\">, such as building out a talent pool of potential applicants, using skills assessments to streamline candidate screening and selection, or experimenting with new automation technologies.&nbsp;<\/span><\/p>\n\n\n        <div class=\"mb-8 top-tip\">\n            \n                            <span class=\"flex items-center text-dark-purple-100 opacity-60 uppercase mb-2 text-sm font-bold\">\n                    <img decoding=\"async\" class=\"!w-6 !h-6 !object-contain mr-2\" src=\"https:\/\/toggl.com\/blog\/wp-content\/themes\/toggl-mjtweaver\/img\/brain.png\" alt=\"Top tips to enlarge those brains\" aria-label=\"Top tips to enlarge those brains\" width=\"24\" height=\"24\" loading=\"lazy\">    \n                    <span>Top tip:<\/span>\n                <\/span>\n            \n            <div class=\"bg-yellow-30 border-t-[3px] border-yellow-100 px-6 pt-6 pb-2\"><p><span data-color=\"transparent\">Invest in internal HR function. Smaller businesses often rely on external recruitment agencies for longer than needed. If you\u2019re growing fast, invest in an internal HR function to shave off some costs.<\/span><\/p>\n<\/div>\n        <\/div>\n    \n\n\n<h2 class=\"wp-block-heading\"><\/h2>\n","protected":false},"excerpt":{"rendered":"<p>Fact: Hiring costs are steep. Between employee wage and payroll taxes on one side and recruiting costs on the other, even small businesses can end&#8230;<\/p>\n","protected":false},"author":640,"featured_media":48512,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[846],"tags":[884,802,883],"class_list":["post-924","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-talent-acquisition","tag-cost-of-hiring-a-new-employee","tag-hr-resources","tag-recruitment-costs"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The True Cost of Hiring an Employee in 2024<\/title>\n<meta name=\"description\" content=\"What&#039;s the cost of hiring an employee? Here is a breakdown of some of the most common hiring costs across industries.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The True Cost of Hiring an Employee in 2024\" \/>\n<meta property=\"og:description\" content=\"What&#039;s the cost of hiring an employee? Here is a breakdown of some of the most common hiring costs across industries.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee\" \/>\n<meta property=\"og:site_name\" content=\"Toggl Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Toggl\/\" \/>\n<meta property=\"article:published_time\" content=\"2024-07-19T11:42:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-01-27T14:35:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2018\/05\/The-True-Cost-of-Hiring-an-Employee-in-2024-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1800\" \/>\n\t<meta property=\"og:image:height\" content=\"1091\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Elena Prokopets\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@toggl\" \/>\n<meta name=\"twitter:site\" content=\"@toggl\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Elena Prokopets\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"17 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#article\",\"isPartOf\":{\"@id\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee\"},\"author\":{\"name\":\"Elena Prokopets\",\"@id\":\"https:\/\/toggl.com\/blog\/#\/schema\/person\/6483f71439e029b11610d674821a0b0f\"},\"headline\":\"The True Cost of Hiring an Employee in 2024\",\"datePublished\":\"2024-07-19T11:42:48+00:00\",\"dateModified\":\"2026-01-27T14:35:10+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee\"},\"wordCount\":3451,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/toggl.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#primaryimage\"},\"thumbnailUrl\":\"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2018\/05\/The-True-Cost-of-Hiring-an-Employee-in-2024-1.png\",\"keywords\":[\"Cost of Hiring a New Employee\",\"HR Resources\",\"Recruitment Costs\"],\"articleSection\":[\"Talent Acquisition\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee\",\"url\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee\",\"name\":\"The True Cost of Hiring an Employee in 2024\",\"isPartOf\":{\"@id\":\"https:\/\/toggl.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#primaryimage\"},\"image\":{\"@id\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#primaryimage\"},\"thumbnailUrl\":\"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2018\/05\/The-True-Cost-of-Hiring-an-Employee-in-2024-1.png\",\"datePublished\":\"2024-07-19T11:42:48+00:00\",\"dateModified\":\"2026-01-27T14:35:10+00:00\",\"description\":\"What's the cost of hiring an employee? Here is a breakdown of some of the most common hiring costs across industries.\",\"breadcrumb\":{\"@id\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#primaryimage\",\"url\":\"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2018\/05\/The-True-Cost-of-Hiring-an-Employee-in-2024-1.png\",\"contentUrl\":\"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2018\/05\/The-True-Cost-of-Hiring-an-Employee-in-2024-1.png\",\"width\":1800,\"height\":1091,\"caption\":\"The True Cost of Hiring an Employee in 2024\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/toggl.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The True Cost of Hiring an Employee in 2024\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/toggl.com\/blog\/#website\",\"url\":\"https:\/\/toggl.com\/blog\/\",\"name\":\"Toggl Blog\",\"description\":\"Everything works much better with Toggl\",\"publisher\":{\"@id\":\"https:\/\/toggl.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/toggl.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/toggl.com\/blog\/#organization\",\"name\":\"Toggl\",\"url\":\"https:\/\/toggl.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/toggl.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2022\/10\/toggl-logo.png\",\"contentUrl\":\"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2022\/10\/toggl-logo.png\",\"width\":814,\"height\":814,\"caption\":\"Toggl\"},\"image\":{\"@id\":\"https:\/\/toggl.com\/blog\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/Toggl\/\",\"https:\/\/x.com\/toggl\",\"https:\/\/www.instagram.com\/usetoggl\/\",\"https:\/\/www.linkedin.com\/company\/toggl\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/toggl.com\/blog\/#\/schema\/person\/6483f71439e029b11610d674821a0b0f\",\"name\":\"Elena Prokopets\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/secure.gravatar.com\/avatar\/7e12b174c3d6a003e9bc6a01cd433ee58f124a34fee304e6259b12159727b168?s=96&d=mm&r=g\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/7e12b174c3d6a003e9bc6a01cd433ee58f124a34fee304e6259b12159727b168?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/7e12b174c3d6a003e9bc6a01cd433ee58f124a34fee304e6259b12159727b168?s=96&d=mm&r=g\",\"caption\":\"Elena Prokopets\"},\"description\":\"Elena is a senior content strategist and writer specializing in technology, finance, and people management. With over a decade of experience, she has helped shape the narratives of industry leaders like Xendit, UXCam, and Intellias. Her bylines appear in Tech.Co, The Next Web, and The Huffington Post, while her ghostwritten thought leadership pieces have been featured in Forbes, Smashing Magazine, and VentureBeat. As the lead writer behind HLB Global\u2019s Annual Business Leader Survey, she translates complex data and economic trends into actionable insights for executives in 150+ countries. Armed with a Master\u2019s in Political Science, Elena blends analytical depth with sharp storytelling to create content that matters.\",\"url\":\"https:\/\/toggl.com\/blog\/author\/elena\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The True Cost of Hiring an Employee in 2024","description":"What's the cost of hiring an employee? Here is a breakdown of some of the most common hiring costs across industries.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee","og_locale":"en_US","og_type":"article","og_title":"The True Cost of Hiring an Employee in 2024","og_description":"What's the cost of hiring an employee? Here is a breakdown of some of the most common hiring costs across industries.","og_url":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee","og_site_name":"Toggl Blog","article_publisher":"https:\/\/www.facebook.com\/Toggl\/","article_published_time":"2024-07-19T11:42:48+00:00","article_modified_time":"2026-01-27T14:35:10+00:00","og_image":[{"width":1800,"height":1091,"url":"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2018\/05\/The-True-Cost-of-Hiring-an-Employee-in-2024-1.png","type":"image\/png"}],"author":"Elena Prokopets","twitter_card":"summary_large_image","twitter_creator":"@toggl","twitter_site":"@toggl","twitter_misc":{"Written by":"Elena Prokopets","Est. reading time":"17 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#article","isPartOf":{"@id":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee"},"author":{"name":"Elena Prokopets","@id":"https:\/\/toggl.com\/blog\/#\/schema\/person\/6483f71439e029b11610d674821a0b0f"},"headline":"The True Cost of Hiring an Employee in 2024","datePublished":"2024-07-19T11:42:48+00:00","dateModified":"2026-01-27T14:35:10+00:00","mainEntityOfPage":{"@id":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee"},"wordCount":3451,"commentCount":0,"publisher":{"@id":"https:\/\/toggl.com\/blog\/#organization"},"image":{"@id":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#primaryimage"},"thumbnailUrl":"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2018\/05\/The-True-Cost-of-Hiring-an-Employee-in-2024-1.png","keywords":["Cost of Hiring a New Employee","HR Resources","Recruitment Costs"],"articleSection":["Talent Acquisition"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee","url":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee","name":"The True Cost of Hiring an Employee in 2024","isPartOf":{"@id":"https:\/\/toggl.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#primaryimage"},"image":{"@id":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#primaryimage"},"thumbnailUrl":"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2018\/05\/The-True-Cost-of-Hiring-an-Employee-in-2024-1.png","datePublished":"2024-07-19T11:42:48+00:00","dateModified":"2026-01-27T14:35:10+00:00","description":"What's the cost of hiring an employee? Here is a breakdown of some of the most common hiring costs across industries.","breadcrumb":{"@id":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#primaryimage","url":"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2018\/05\/The-True-Cost-of-Hiring-an-Employee-in-2024-1.png","contentUrl":"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2018\/05\/The-True-Cost-of-Hiring-an-Employee-in-2024-1.png","width":1800,"height":1091,"caption":"The True Cost of Hiring an Employee in 2024"},{"@type":"BreadcrumbList","@id":"https:\/\/toggl.com\/blog\/cost-of-hiring-an-employee#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/toggl.com\/blog\/"},{"@type":"ListItem","position":2,"name":"The True Cost of Hiring an Employee in 2024"}]},{"@type":"WebSite","@id":"https:\/\/toggl.com\/blog\/#website","url":"https:\/\/toggl.com\/blog\/","name":"Toggl Blog","description":"Everything works much better with Toggl","publisher":{"@id":"https:\/\/toggl.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/toggl.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/toggl.com\/blog\/#organization","name":"Toggl","url":"https:\/\/toggl.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/toggl.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2022\/10\/toggl-logo.png","contentUrl":"https:\/\/toggl.com\/blog\/wp-content\/uploads\/2022\/10\/toggl-logo.png","width":814,"height":814,"caption":"Toggl"},"image":{"@id":"https:\/\/toggl.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/Toggl\/","https:\/\/x.com\/toggl","https:\/\/www.instagram.com\/usetoggl\/","https:\/\/www.linkedin.com\/company\/toggl"]},{"@type":"Person","@id":"https:\/\/toggl.com\/blog\/#\/schema\/person\/6483f71439e029b11610d674821a0b0f","name":"Elena Prokopets","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/7e12b174c3d6a003e9bc6a01cd433ee58f124a34fee304e6259b12159727b168?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7e12b174c3d6a003e9bc6a01cd433ee58f124a34fee304e6259b12159727b168?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e12b174c3d6a003e9bc6a01cd433ee58f124a34fee304e6259b12159727b168?s=96&d=mm&r=g","caption":"Elena Prokopets"},"description":"Elena is a senior content strategist and writer specializing in technology, finance, and people management. With over a decade of experience, she has helped shape the narratives of industry leaders like Xendit, UXCam, and Intellias. Her bylines appear in Tech.Co, The Next Web, and The Huffington Post, while her ghostwritten thought leadership pieces have been featured in Forbes, Smashing Magazine, and VentureBeat. As the lead writer behind HLB Global\u2019s Annual Business Leader Survey, she translates complex data and economic trends into actionable insights for executives in 150+ countries. Armed with a Master\u2019s in Political Science, Elena blends analytical depth with sharp storytelling to create content that matters.","url":"https:\/\/toggl.com\/blog\/author\/elena"}]}},"_links":{"self":[{"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/posts\/924","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/users\/640"}],"replies":[{"embeddable":true,"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/comments?post=924"}],"version-history":[{"count":59,"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/posts\/924\/revisions"}],"predecessor-version":[{"id":57798,"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/posts\/924\/revisions\/57798"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/media\/48512"}],"wp:attachment":[{"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/media?parent=924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/categories?post=924"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/toggl.com\/blog\/wp-json\/wp\/v2\/tags?post=924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}