When you increase your business that usually means hiring more employees. At first glance, this seems like an overall positive business move as it helps you expand. However, you should be aware that there are some hidden costs associated with hiring employees.
Employee Benefits
On top of salary costs, according to Beebole, you also need to account for the benefits your employees are earning. There are many laws in place that have set forth certain requirements for employee benefits. These benefits include Social Security, healthcare plans, and other optional benefits. While it may seem like an extra expense, it’s often worth it to include optional benefits. Sometimes these costs are relatively small. They also show your employees that you value them. Overall, the cost of employee benefits is worth it. Besides, the cost of not including benefits is much greater.
Insurance Costs
Along with benefits, there are also insurance costs that go along with hiring employees. These insurance costs are mainly associated with the operations of your business. Depending on your type of business, you may need insurance for your building, your equipment, vehicles, merchandise, or in case there’s an accident. The more moving parts you have in your business, the more insurance you may need. This insurance can be costly but helps to protect you and everyone you work with. According to Barnes Disability, workers’ compensation insurance helps protect workers and business owners regardless of who is at fault for an injury. Having a financial safety net is definitely a plus.
Hiring and Onboarding Costs
According to MyJobOffer, one area of cost that is often forgotten is hiring. Before you’ve even hired a new employee, you have to spend time and money advertising the job, interviewing candidates, calling references, and more. Then once you do hire someone, you still lose time and money during training. This includes time spent by the trainer to onboard the new employee. A lot of time is also spent on the new employee learning the business before they can actually start work. Not to mention, there are plenty of administrative costs associated with hiring and onboarding.
Running a business already has many expenses you need to account for. Hiring employees, while also giving you the opportunity to expand your business, can lead to many hidden costs. As you begin to add members to your team, make sure you are aware of what it will cost you and make sure you can afford it. You don’t want to be caught unaware once you do hire new employees.
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