Internal HR Department v. External Human Resources Department
Human Rersources: Internal v. External Comparison
Your average cost per hire is quite simply the total amount you spend on recruitment annually (more details on that below) divided by the total number of hires you made that year.
Only by drilling down into the component costs can you begin to determine your cost per hire for an individual role, or by department—and only then do the figures begin to yield useful information.
These component costs break down into two major categories, and even within these categories, you’ll find that only some costs are negotiable, while others are fixed.
Internal HR Personnel Salary/Payroll Department Cost
The average Human Resources Department in US companies has a payroll of $106,000 annually but that considers all US businesses, including small businesses.
The HR department of most professional companies has a anywhere from 4-8 dedicated professionals earning between $40,000-$80,000 annual salary. At its lowest it accounts for over $200,000 in annual salary for your human resources department.
External Human Resources Salary/Compensation
Silicon Staffing corporate hiring rates is anywhere from $2500 to $7000 per hire, which includes recruiting, screening, interviewing, scheduling, and all OnBoarding.
At an average cost of $5000 per hire, compared to a low end payroll of a HR departrment, you can hire 40 screened, valididated, professionals, this figure does not include the additional costs and risk factors which you should see below.
Internal Human Resources Recruiting Cost
Advertising fees, travel costs, job fair and career fair fees, testing services, background checks, refrral bonusses are all added costs for an internal human resources department. These cost per hire average between $1000-$5000 per hire in addition to your HR Department personnel salaries.
External Human Resources Recruiting Cost
All expenses are included in the base price. No additional fee
Internal Human Resources Risk Management Factors
Each interview, each hire, each fire has a risk. Candidates are people, people with emotions, right or wrong, sometimes they are offended about you said, didnt say, or what they thought they heard. Maybe they are just upset they didnt get the job, but those emotions can be costly to a company !
Not only in possible law suits, but in the irrepliable damage it can cost the reputation of your company both to your clients and customers but also in future recruiting tours. This is a risk factor that can be managed but not entirely eliminated simply because of the nature of the process. This can be the most damaging and costly of all the factors. The average employment lawsuit settlement is $125,000 !
External Human Resources Risk Management Factors
We are the Firewall to your companies reputation. Silicon Staffing assumes responsibility for the entire process from the initial recruiting stages all the way to employee discharge. The greatest advantage of using an external HR is allowing the agency to assume the risk of the employment process.