Given the current economic uncertainty, building resilience is the top priority for many businesses.
That's especially true for those producing, packaging, and shipping products, who need to delicately balance both 100% on-time deliverability and fiscal responsibility. Given that labor is a significant percentage of overall expenses, we've outlined the factors associated with hiring a full-time employee vs. temp worker.
Plus, we built a template that you could use for your own workforce planning, which you can download at the bottom of this article.
Below we breakdown the total cost of a worker and recruiting costs. Before we dive deeper, it’s worth noting that when hiring efforts are due to employee turnover, many Human Resource experts include indirect costs, like the loss of productivity, which can increase overall costs to an average of $1,500 for hourly employees and take on average of 24 days.
Here are the common factors into a worker’s compensation outside of hourly base pay.
Based on benchmark data on typical warehouse associate roles, we find that over 20% of a worker’s total cost consists of benefits, taxes, and insurance. A full-time employee’s annualized cost can be comparable to that of a temporary worker.
Want to enter your own numbers? Download the cost model template at the bottom of this article.
While it’s likely not a surprise that recruiting requires time and money, the actual cost can be more than you expect. Especially in these times, workers are affected by a lack of reliable public transport, childcare, and health conditions, making day-to-day operations potentially more volatile. This means your HR team will spend more time finding, managing, and maintaining workers to ensure they show up consistently
We break down the costs both in time required to recruit and the tools needed to hire a worker.
*At an average HR Manager rate of $50/hr, **Based on a range between Craigslists post ($40/post) to ZipRecruiter daily post rate ($16/post daily) over average time-to-fill of 24 days.
For temp workers, a staffing agency like Instawork does all of the recruiting for you. Here’s how Instawork delivers:
How does your full-time employee cost compare with the cost of hiring through a staffing agency?