Hidden Costs of Hiring In-House Employees in the US

The United States has traditionally viewed in-house employee hiring as a secure method for a company's expansion; however, by focusing solely on the benefits of being able to meet and collaborate face to face with local hires, the true costs of hiring staff locally may be overlooked by most companies. The administrative and operational breakdown of the cost of hiring local staff is much more extensive than just paying employee salaries alone; there are many hidden costs that may go unnoticed by employers who rely solely on hiring local personnel and not considering other alternatives for staffing.

By understanding these hidden costs associated with hiring in-house, it allows business owners to weigh the advantages and disadvantages of hiring locally versus remotely (offshore) as well as provide them with a clearer idea of how much it will actually cost them to hire-based their own business.

The Salary Is Only The Beginning

When hiring an in-house employee, there is a visible cost: the salary. However, other costs related to the employee, such as:

• Payroll taxes
• Health benefits
• Retirement contributions
• Vacation/Sick Days
• Bonus/Incentives

With many roles, benefits will add 25-40% to base salary. This creates a considerable financial burden to the business (especially to administrative, support, and operational positions).

Hiring and Recruitment Costs

Hiring Locally Consists Of: Job ads, recruiter costs, interview time, background checks, etc. A basic hiring can cost thousands of dollars prior to the employee being able to begin work; if the hiring does not work out, those costs can become exponential very rapidly.

Employee Training and Ramp Up Time

It's not uncommon for a new employee to not start contributing to the company until they are fully trained and productive (this training may include: shadowing other employees, management oversight, mistakes during the training process, etc). During this time period, businesses essentially pay the employee full wages for an employee who's only partially productive; This cost can compound significantly in businesses with high turnover.

Office Space & Infrastructure

Employees that work at the company need:

• An Office
• Office Equipment & Software
• Utilities & Maintenance

As a company's number of employees increases, the cost of the company's physical infrastructure increases, consequently reducing flexibility and increasing long-term commitments to the company.

Employee Productivity Loss & Burnout

In-house teams working over capacity frequently perform both the low value task and the high value task. This combination causes:

• Reduced Productivity
• Employee Burnout
• Higher Turnover Rates

When a company has to replace an employee who has flamed out, it begins again the cycle of hiring costs.

Cost of Compliance and HR Overhead

US labor laws are complicated. Companies must ensure their employment practices comply with:

• Employment Compliance
• HR Administration
• Payroll Processing

Managing the complex nature of Employment Compliance, HR Administration, and Payroll Processing, together with the administrative aspects of these processes within an organization takes considerable time and energy away from growth opportunities, and places a drain on resources.

The More Efficient Option: Offshore and Remote Staffing

The growing trend of remote offshore staffing solutions is helping to eliminate these costs for many organizations. By utilizing offshore staffing, organizations can:

• Decrease labour costs
• Eliminate costly benefit-based payroll systems
• Expand their capabilities without the need to grow their physical footprint

Instead of replacing an existing operational workforce, remote staffing serves to help support existing employees by relieving them of an overwhelming number of routine and repetitious duties.

How Superior CS Group Helps

Through the use of highly-trained offshore professionals in a wide variety of fields including, but not limited to, Administrative, Healthcare, Construction, Real Estate, eCommerce, Sales, Accounting, Engineering, IT, and many more, Superior CS Group allows organizations to reduce the hidden hiring costs of employing personnel. Through a structured onboarding process, the ability to monitor and review performance in real-time, and the assignment of a dedicated project manager, organizations gain a predictable cost structure and a sustainable growth platform, while at the same time, avoiding the associated payroll burden.