The question of whether to use an employment agency or do your own hiring in house can be a difficult one for the mid-sized business. Generally small businesses do all of their hiring in-house and large company will use recruitment companies. That leaves the mid-sized business that must evaluate the value of their time versus money to decide if switching to agency hiring is the right move for them. In order to make this decision it is necessary to understand the true cost of hiring.

To understand the true cost of hiring you need to look at three areas. These areas are the recruitment costs, the selection costs and the orientation and training costs. Recruitment costs include want-ad postings, marketing material (brochures, videos, recruitment cards etc), community outreach and job fair expenses, office supplies and the salaries of your human resources personnel. Selection costs include background clearances (including time for phone calls, faxes, letters and emails), applicant packet materials and the time for preparing them, applicant testing time and materials, applicant screening and interviews, office supplies and the salaries of the human resources workers involved. Orientation and training costs include the cost of training materials, the cost of any certifications necessary, the new salary and the salaries of those involved in the training process. To find your real cost of hiring, add all of these costs together and divide by the number of new hires. The large figure is likely to surprise you and cause you to rethink your hiring approach.

To decide if it is time to use a recruitment company add together 100% of the costs of the recruitment section and 70% of the costs of the selection section. Divide that number by the number of employees needed and you will have a hiring cost per employee - if the recruitment company is charging less than that amount it is time to switch to an agency for your hiring.

Find an agency that has a reputation for good work in your field and turn recruiting over to them. You can then turn your efforts towards instituting training and incentive programs that will help you maintain your workforce. It is always better to keep an employee that you have invested time and training in already and better incentives are a good way to do that. Flex-time, extra holiday time, performance bonuses and a relaxed dress code are all incentives you can apply for very little cost. Training that excites and empowers your personnel to take more control of their work output and have a positive effect on the organization can be a great investment of time and money.