How Does Wage Analysis Improve Employee Costs?
Performing a wage analysis on the organization's vital positions can help determine a fair wage for all employees based on the type of work they are performing. This process can also help create a "pay cap" that can only be surpassed once the employee moves into a new position through recognized work or skills. If a team member is not performing their duties, they should not be entitled to a wage increase. But how does a wage analysis directly impact employee costs and ensure that a business is not inadvertently setting itself up to lose cash flow on high employee costs?
A wage analysis can provide valuable insight into the correct pay scale to provide employees based on both local and national data. Not only does this help business leaders determine a fair starting salary and benefits, but it can also create room for salary increases based on performance or provide guidelines for potential bonus opportunities that may be available. At the same time, this helps ensure that new employees are not being overpaid and draining the capital or financial resources that could be used to expand the workforce or improve services for external clients and internal shareholders.
Providing employees with a higher wage than competitors may seem like a smart business decision to attract the top talent. The only caveat to this approach is that the right checks and balances need to be in place to ensure high employee costs do not negatively impact the organization as a whole. A wage analysis is the best way to do this. However, continual research will need to be completed at least bi-annually to keep up with the changing market. Through options like performance based staffing, organizations can rest easy knowing that the employees they have are receiving the best wages possible without the potential for a financial drain to occur.
How Can Targeted Recruitment and Retention Programs Decrease Employee Costs?
A company needs to establish a process to track the effectiveness of its recruitment sources. Some important metrics to consider include the source of the hire, the cost of the hire and the type of candidate recruited. With this information, companies should determine patterns and learn which targeted recruitment sources are controlling high-employee costs. With this information, the company can invest more into those sources to continue finding top talent at the most affordable prices possible.
Many different factors go into a targeted recruitment and retention program. Companies may need to outline several additional expenses associated with this process to ensure they are getting the actual cost associated with hiring new talent. This can include the cost of working with a recruiter to find new talent, the salaries of other team members involved in the process, advertising costs and much more. When added up, the average associated costs could range from between $3,500 to $5,000 when everything is accounted for.
One of the easiest ways to decrease high employee costs associated with recruitment is to ensure that you have an excellent retention program in place. This can reduce the overall need to seek new employees and help save time and money while still ensuring that top talent is available internally year-round. Simply put, companies cannot afford to neglect their retention programs to ensure that their most valuable employees remain productive as long as possible.
Attracting and retaining top talent is a wise business decision for any industry. The only problem with this approach is that most employers do not have a system to ensure that they are investing in targeted recruiting and retention programs that make a positive impact. Certified Source can help simplify the process of eliminating high employee cost through performance based staffing services. With this strategy in mind, employees can rest easy knowing they are not only attracting the best talent possible but ensuring they have the incentivization to stay long term.
How Can Pre-Screening Decrease High-Employee Costs?
There has been a known talent shortage worldwide that affects nearly any industry, from manufacturing to accounting. According to a recent survey from Nearshore Americas, almost 69% of employers struggle to fill their vacant positions, a stark contrast from the 14% that found it difficult in 2010. Unfortunately, this leads many employers to settle on sub-par candidates as a band-aid solution to increase productivity and ensure corporate headcounts are being met. Typically this occurs at the expense of an employer as they pay steep onboarding and turnover costs.
With pre-screening, employers can make more informed decisions about the candidates they are pursuing. Not only will they have an accurate reflection of past job experience and the length of time the employee remained with the company, but they can also gather information about their skills and determine how they will fit into organizational needs. Suppose a hiring manager winds up hiring the wrong candidate. In that case, it could significantly cost the organization by further hindering productivity and limiting the growth that the organization can achieve. This makes ensuring candidates are only given an offer following extensive pre-screening.
Ensuring a candidate-friendly experience is critical for success with pre-screening to eliminate high-employee costs. Unfortunately, that means that pre-screening needs to be more robust than it was in the past. As technology-driven generations rely more on social media and mobile platforms, employers should also factor these characteristics into their pre-screening strategy. Using gamification strategies to attract talent in these audiences may be a great starting point while also challenging their skills or abilities as potential employees. Certified Source has developed innovative pre-screening methods to ensure our performance based staffing clients find the right candidate and limit the potential for high employee costs.
How Can Pre-Employment Evaluations Decrease High Employee Cost?
While pre-employment evaluations can save an organization from making the wrong hire, they will require upfront costs for testing. However, as previously noted, the cost of a bad hire could be as much as two times the projected salary for the employee. This can quickly add up if even just a few bad hires are occurring annually. With a pre-employment evaluation, organizations can use accurate data on an employee to determine whether they will be a great long-term fit or if they should continue searching for other candidates. Although, there is often more to the equation than just these factors.
Another potential turnover factor that could contribute to high employee cost is legal ramifications if the employee resigns or leaves feeling like they were the subject of what they perceived as wrongs at the employer's hands. More often than not, these legal claims can cost a minimum of tens of thousands of dollars to settle. If the organization tries to fight a frivolous legal claim, it can still drain cash reserves that would otherwise be available to hire a more suitable candidate. Having a pre-employment evaluation to ensure the right fit from the beginning can help mitigate this risk.
Pre-employment evaluations may seem daunting for many hiring managers; however, working with a team of experienced staffing professionals can help ensure an efficient and accurate candidate selection process. Certified Source has refined the staffing experience for both employer clients and job seekers through innovative new performance based staffing techniques. This approach helps decrease potential turnover before it occurs and ensures that the organization receives the right candidate based on the qualifications, experience level, and other factors that are most important for verifying the right fit for a job.
How Can Site Orientation Decrease High Employee Costs?
One of the primary goals of a site orientation should be to develop realistic job expectations while also cultivating positive attitudes and increasing the likelihood of job satisfaction. The sooner employees understand their job duties and what is expected of them as an employee with an organization, the faster they can start being a productive member of the much larger team. Each new employee should have an extensive look into the position they were hired for before. As you might imagine, this helps ensure unnecessary or potentially damaging mistakes do not occur.
It is important to understand that a thoughtful site orientation program can save the organization thousands of dollars in the long run. This is a distinct difference that can be seen when a company is wasting money on ineffective training that could be easily avoided. Often, one of the biggest reasons that employees will leave an organization is that they do not feel like they are a welcomed addition to the team or feel like they do not fit into the overarching company culture. Unfortunately, this turnover is often another factor contributing to high employee costs that could otherwise be avoided with a better site orientation program in place.
While the basis of eliminating high employee costs may depend on the recruitment process and the guaranteed rate that a candidate is offered, that does not negate the ongoing support against high employee costs that may be occurring if a well-planned site orientation program is not in place. At Certified Source, we provide performance based staffing solutions that simplify site orientation for organizations while also ensuring that high employee costs are eliminated at each step. That means only the most suitable candidates are being hired at the appropriate price point to support the overall staffing goals of the organization.
How Does Function-Specific Training Reduce High Employee Costs?
It isn’t uncommon for modern businesses to take their time to find an appropriate training strategy that aligns with their goals and budget. The biggest problem that this causes in the interim is that employees can quickly become bored or underappreciated, leading them to seek employment opportunities elsewhere. For many businesses, this means that the financial investments they’ve made on the employee to this point will be lost as turnover costs continue to skyrocket.
The actual benefits of function-specific training are often seen more clearly with new employees within a business. According to a report from Gallup, roughly 87% of millennial workers stress that professional development is one of the most important aspects of a job. Since these employees are the key to building the future workforce, it often puts employers in a very advantageous position. Not only can many of these new employees be obtained at a fraction of the cost of their seasoned colleagues, but they can also be molded into ideal employees through an excellent training program.
Function-specific training is also an ongoing dedication to employees that have been with the company for an extended period. This is particularly beneficial if a business has a graduated pay model that rewards years of service. By providing the appropriate training to expand the knowledge and skills of an employee, they are more likely to meet the cost or pay draw that they are entitled to within the company. In addition to this, these tenured employees can also help further train new employees to advance productivity and bridge further any skills gaps.
Perhaps the best way to ensure training is as effective as possible and high employee costs are kept to a minimum is partnering with an experienced staffing provider. Certified Source offers our clients performance based staffing options designed to meet their unique goals and price points; however, our team can also ensure that employees receive the function-specific training they need to thrive within a business.