Financial literacy–the ability to make informed and effective financial decisions–is most commonly discussed in relation to personal finances. But it is also a critical and underappreciated component of corporate hiring and the financial stakes are high. As the economy continues to grow and hiring picks up steam, it’s a perfect time for organizations to consider the true cost of hiring and increase efficiency for greater fiscal health.
The cost of onboarding
Onboarding a new employee comes with a wide range of costs, both obvious and hidden. You’ll need to provide laptops and/or office equipment, software and, in some cases, pay for their relocation and additional training. And there are other considerations that are sometimes less obvious, like the reduced productivity during ramp-up periods, cost of processing paperwork, and administrative time.
Have you looked at your hiring and onboarding process recently, or has it been awhile since you’ve made any adjustments?
A large consumer packaged goods (CPG) client recently shared how they streamlined their onboarding process during the COVID-19 pandemic. They make sure each new hire receives the same starting package—delivered to their home as the company is still working remotely—which has all the necessary equipment and information for online onboarding and follows the same set schedule for each employee.
What was previously a piecemeal approach making inefficient use of resources, is now a streamlined, cohesive experience for all new hires. By revamping that process, the company is saving on expenses and making a good first impression.
Audit Your Expenses
I just got a Disney+ subscription and I have a sneaking suspicion that I’m rarely going to use it. Even at $7.99 a month I’m probably paying more than the value I will get from it. I am surprised each month by items on my credit card bill that I signed up for then forgot about or that I realize in retrospect weren’t great uses of money. Of course my Disney+ subscription and overpriced coffee aren’t going to break the bank but the corporate equivalent can.
Take the time to audit your spending, especially recurring expenses. For example, did you purchase a tool with a monthly subscription you thought you’d regularly use, but it haven’t touched since? You can likely cancel that subscription. Are you offering one-on-one training for new hires? They might be better presented as sessions for multiple people at once. Are you using desktop-based systems instead of web-based ones? Those extra monthly or annual licenses can be costly. Digitizing administrative tasks when possible saves money and energy, too.
Trade money for efficiency
Finding areas where you can reduce spending is just one element of financial literacy. You can also look at ways in which increased spending money can offer outsized value and help you and your company make more efficient use of resources.
Outsourcing tasks that can be more efficiently executed by someone else frees up internal resources to focus on tasks where they can have greater impact. Recruiting is a prime example of an area where outsourcing to experts can be the most fiscally responsible model. The companies we work with know that the cost of posting to job sites, reviewing resumes, setting up interviews, and pre-screening candidates isn’t where their time is best spent.
Spending some money up front in these cases is a smart financial decision that leads to not only greater efficiency but, crucially, more successful hiring. Turnover is so expensive that more successful recruitment practices save huge amounts of money over the long term.
Investing in Your Employer Brand
Employee experience is top of mind for employers right now. Whether it’s supporting working mothers as they serve as primary caretakers for homeschooled children or investing in Diversity, Equity and Inclusion efforts, great employers have met difficult circumstances by stepping up for their employees. Investing in the wellbeing of your workforce is always money well spent because what you do internally speaks volumes outside of the office.
This past year was difficult on all of us. Yet I read about companies that lost money and still offered bonuses to their employees. There may have been a short-term hit, but in the long run, it’s a smart financial move.
People remember how they were treated and, when you put your employees at the forefront, you’ll earn a stellar reputation. That strong employer brand will support employee retention, make you attractive to top talent and, in turn, have a positive impact on your bottom line.