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What Are The Costs Of Hiring An Employee?

An illustration showing the different employee costsAn illustration showing the different employee costs
min read
August 21, 2023

Assembling the right team is one of the most important parts of building a small business. You want to invest in hiring and training the right people—and then setting those new employees up for success.

There are certain costs associated with hiring a new employee, and those costs will vary based on a variety of factors, including your location, the type of position you’re hiring for, and whether your new hire is a full-time employee or a contractor. But there’s no arguing that hiring an employee is an investment. 

The question is—just how much of an investment is it? 

Let’s take a look at how to calculate the cost of hiring an employee—and how to know when that cost is worth the investment:

What Are The Costs Associated With Hiring A New Employee?

As mentioned, hiring a new employee is an investment. But what, exactly, are you investing in? Or, in other words, what are the costs associated with hiring a new employee?

Clearly, there are a lot of costs to consider when hiring a new employee. But how do those costs translate to actual dollars? While there’s no one-size-fits-all approach to hiring costs (and the actual cost of hiring an employee will depend on a variety of factors), according to a 2016 survey from the Society for Human Resources Management (SHRM), the average cost to hire a new employee is $4,129. 

Is It The Right Time To Hire A New Employee?

Hiring is an essential part of building your business. But hiring a new employee isn’t cheap—and when you do make the investment, you want to make sure you’re hiring at the right time and in the right way.

Before you move forward with hiring a new employee, it’s important to ask yourself:

Asking yourself these questions before you start the hiring process will help you gain clarity into whether it’s the right time to bring a person onboard—and whether the cost of hiring a new employee is a solid investment for your business.

Tips For Bringing Down Hiring Costs

Hiring a new employee can be pricey—but there are definitely ways to bring down the total cost.

Want to cut the costs of hiring a new employee? Here are a few tips to help you save hiring budget (without sacrificing quality):

Another way to bring down hiring costs? Use the right tools. With Hourly, you can onboard new employees in a matter of minutes, which can save you time and money—all for less than what you may be paying with your current payroll provider.

Ready to get started? Get in touch and find out how Hourly can help you save time and money during the hiring process—and continue to help you save time and money after your employee is hired. 

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