Been thinking of hiring some employees for your company?
Taking on employees could allow you to expand your business and take on more customers, helping you to generate more income in the long run. However, you also need to weigh up the cost of becoming an employer.
Whilst wages are an obvious expense, there are many other hidden costs that come with taking on employees. Here are just a few of these hidden costs to factor in before employing your first staff members.
#1 Recruitment
The recruitment process can be costly. On top of paying for job advertising, you may want to budget in hiring a recruiter.
There may also be training costs to consider. Whilst you can skimp back on recruitment costs, it might limit the number of applicants you get and decrease your chances of finding that perfect employee.
Set some money aside so that you can recruit the best staff for the job.
#2 Insurance
As an employer, you need to take out employer’s liability insurance by law. If an employee is injured or made sick through work, this insurance scheme will help pay the compensation they need.
You can shop around for this insurance to find a cheap deal and may be able to combine it with a business insurance bundle containing other useful schemes.
#3 Legal Costs
It’s worth hiring a solicitor so that you’re up to date on employment law. You may be required to make certain improvements to your premises such as adding health and safety features and protecting personal data on employees with strong security measures.
This will involve spending some money but could be worthwhile if it saves you costs in lawsuits in the long run. You may also want to consider getting employees’ contracts professionally written up and potentially changing your business structure.
#4 Equipment
Your employees may need to have equipment of their own, whether this involves uniforms or computers or extra tools.
Ideally, you want to buy good quality equipment so that your employees can work more efficiently and feel prouder of the company. Equipment costs may vary depending on the type of business.
#5 Work benefits
There are some basic benefits that every company needs to have in places such as holiday pay, sick pay and a pension contribution. You can also opt for other incentives as a way of keeping your employees happy.
This could involve giving out bonuses for those that exceed targets. You may also want to buy treats such as a good quality coffee machine or a vending machine.
Some employers may go as far as to supply their staff with work phones or company cars as a way of encouraging them to stay at the company. Think about which incentives you want to offer and make sure you’ve put aside enough money to afford these benefits. So whether its employer’s liability insurance, equipment, or work benefits your company needs to be aware of these costs.
What other kinds of cost do you deal with when it comes to employees?
