How Much Do Jobs Cost?
During the last Presidential Election, debate focused for awhile on Joe the Plumber. Although the persona of this figure quickly became symbolic of something larger than life, this interlocutor into the election raised for many Americans what it means to create jobs.
What exactly does it mean to create a job? Many of us do not know the full extent of the commitment that goes into the hiring and retention of each employee. Although everyone is well-versed in the havoc wreaked by national unemployment, many are far removed from what it means to actually provide a full-time job to someone.
Recruiters are close to this process but may wish to pause and think about the funds that each hire requires. The Bureau of Labor Statistics releases its figures for the holistic costs of employment.
Compensation costs for private industry workers increased 2.1 percent for the 12-month period ending December 2010, higher than the 1.2 percent increase for the 12-month period ending December 2009. These higher employment costs can put pressure on hiring.
The wage and salary series increased 1.8 percent for the current 12-month period. The change for the period ending December 2009 was 1.3 percent. The cost of benefits for private industry workers increased 2.9 percent for the 12-month period ending December 2010, higher than the December 2009 increase of 0.9 percent.
Among occupational groups, compensation cost increases for private industry workers for the 12-month period ending December 2010 ranged from 1.5 percent for service occupations to 2.4 percent for production, transportation, and material moving occupations.
Overall, it seems that it costs more than ever to hire and keep employees. Wages, salaries, and benefits cost more this year than they did last, and the trend appears to be continuing. Unfortunately, recruitment costs are often factors into the equation as well (even internal recruitment efforts), so the total cost of an employee is quite staggering. When working with line managers or company executives, recruitment professionals should be sure to address recruiting and talent management issues strategically – that means considering the costs and benefits to talent initiatives in very concrete terms. As the cost of a job continues to grow, finding great talent of course becomes an even more strategic imperative.