Employing the right employee enhances your work culture and has the added benefit of paying you back in high employee morale, accomplishing challenging goals and positive forward thinking planning.
However, depending on the role in question, business owners searching for new staff face the predicament of either investing in a recent graduate or hiring a candidate with relevant experience. In terms of salary, the difference is an obvious factor, but what are other considerations an employer should take when taking on a new recruit?
SmallBusinessPrices.co.uk conducted a study into the true cost of hiring in 5 key job employment sectors including accountancy, advertising, advertising, legal, retail and technology to look at the often overlooked aspects of recruitment.
Recruitment
From advertising and marketing the job vacancy to the selection and assessment process, hiring new staff can be a long and tedious procedure for both the potential employees and employers.
The ‘attraction and marketing’ costs involved in onboarding in the accountancy industry was the lowest in the study at only £800 compared to a massive £5,191 in the legal sector. When it came to the selection and assessment process (the most time- consuming process) the cost was £1,181 per employee across all sectors. From advertising a job to assessing candidates, the combined total of businesses is an average of £3,356.
The Pay-Gap
Unsurprisingly salary is the largest financial difference between graduates and experienced employees, although certain career sectors offer larger financial incentives for loyal employees.
Law graduates offer the biggest prospects to potential employers, earning an average of £38,000 at the graduate level, however, jumping to an impressive £64,000 after 3 years. Whereas, those in the IT and Technology industry earn an average of £11,000 and more after 3 years, from £19,150 to £30,000. Across all of the 5 industries, the average starting salary for graduates was £24,000, which rises to a massive £35,700 after 3 years experience.
Pension Contribution
With planning for the future so important to anyone joining or on the career ladder the amount put away for pension might not be at the forefront at an employees however it is still important. Employers contribute an average of 3% of salary as part of pension schemes.
With a substantial starting salary, law graduates cost their employers over £5,000 in the time they typically stay in the role in just pension contributions. Employees with 3 years experience spend an average of 6 years in a role and set employers back £6,865 during their time with a company.
Both types, graduates and experienced candidates are able to offer so much to a company when they join, but it’s always important to consider the impact they’ll have on resources.
Ian Wright from SmallBusinessPrices.co.uk has commented
‘Employees can offer so much to companies of any size, but it’s always important to consider the financial impact they have as well. Some business owners would rather train someone from scratch, almost like an investment, but the value of an experienced employee is that they can hit the ground running. While these are fairly obvious assumptions, it’s interesting to see the hard figures and how it varies across different industries.’
There is no denying the fact that searching and onboarding is an expensive process. Deciding on recent graduate or an experienced candidate depends on many factors you have to take into account before hiring.
Not all companies are in a position to commit to the resources and finances needed for training a graduate so it may be beneficial to hire a candidate who has already received the necessary training. So before you take on a new recruit, explore The True Cost of Hiring and to see how recruitment differs depending on the industry in question.