Why Accounting & Finance Departments Count On Project Staffing? - PhoenixCEOCFO.com

Why Accounting & Finance Departments Count On Project Staffing?

Michael Swiszcz, Branch Manager - Ledgent

If your business goals involve lowering costs and using more efficient processes, then you can count on a staffing firm to help you succeed. As an Accounting & Finance manager, you probably calculate cost per hire to measure the effectiveness of your workforce. But, are you calculating all the costs associated with hiring? This whitepaper unveils the actual and hidden costs of hiring and how a staffing firm can lower your costs and help you manage the workload.

The hiring process begins with the traditional costs of recruitment. Statistics show that, believe it or not, the most traditional method is still newspaper classified advertising. The costs vary depending on the size and location of the ad. For example, the average cost per line per day is $19.12 to place an ad in a metropolitan area newspaper. Alternatively, a full page ad will cost an average of $1,480.

The average Accounting & Finance department runs a newspaper posting for one week for the open position = $320.

The Internet is a frequently used recruitment source and most newspapers automatically place their classifieds into online job boards. Again, the costs of direct internet recruiting vary depending on location and number of postings. For example, it costs $365 for a single posting on Monster.com, $250 for a posting on Jobing.com and $419 for a single 30-day posting on Careerbuilder.com.

The average Accounting & Finance department places an open position on two job boards for one month = $850 Other forms of sourcing candidates include job fairs, open houses and college recruiting, all of which have real dollar costs associated with them.

When all is said and done, the average company spends monthly on recruiting = $750

Then there's the screening process. Assuming your ad or posting generates 100 responses, you incur costs as soon as you begin reviewing resumes. For example, if three minutes are spent on each resume by a Human Resources or Office Assistant (making $17/hour), it will cost $85 to complete the initial screen. If 20 resumes are selected for review by the hiring manager (making $29/hour) it will cost an additional $50 (assuming it takes five minutes to review each resume and cover letter).

Screening = $135

The next step in the hiring process is interviewing. If, from the original 100 respondents, five candidates are selected to partake in the interview process, you will need to factor in the cost of having all five candidates meet with your management staff. For example, one
hour spent with the Human Resources Manager (making $28/hour) costs $140; one hour with the hiring manager ($36/hour) costs $180; and one hour with the Accounting Director ($52/hour) costs $260.

Initial interviewing cost = $580

Once the interviews are complete, if all three managers spend one hour together reviewing the candidates, another $116 is added to your hiring costs. If two finalists are selected and scheduled to return to meet with two other line managers, tour your facility and eat lunch with the department, you can tack on another $600.

Total Interviewing cost = $1180

If drug tests and background checks are required ($100 each) you can add another = $200

Once hired, the cost of training and orientation must also be added to the equation, which, depending on the position, can range anywhere from $200 to $10,000. These costs include literature (manuals, brochures, policies, etc.), as well as time invested by the employee and trainer.

Furthermore, most companies offer a comprehensive benefits package, with internal costs averaging 30% of an individual's salary.

In the first 90 days of employment (the time period most organizations use for evaluation), benefits can cost an organization up to $4,000 (for a position with an annual salary of $50,000)

Hiring costs must also include both retention and attrition. This is perhaps the most difficult area to estimate because some companies spend little to no money while others spend thousands on incentives and "perks," all designed to build and retain loyal employees.

Our findings indicate annual spend on retention per employee to be = $3,000 to $7,000

Most attrition, either voluntary or involuntary, occurs within the first 90 to 180 days. When this happens, you will need to include the added costs of finding a replacement (e.g., recruitment, screening, interviewing, training, orientation, benefits, etc.); in addition to the actual dollars already spent on the departed employee.