Everything Seems to Cost More Right Now, Including Hiring: Why Fractional Support is the Smarter Choice

If you're still committed to finding the traditional 9-5, in-office employee, you’re not just missing out on accessing the best talent—you’re also working against your profit margins. In today’s climate, where the cost of doing business keeps climbing, many companies are turning to remote workers, fractional support, and contractors to ease the burden.

While this shift can open up more opportunities, it’s still an expensive process. You’re responsible for finding, hiring, and onboarding talent, all of which demand significant investments in both time and money.

If you feel like hiring costs are dragging down your profitability, we have an alternative solution. But first, let’s take a closer look at the real cost of hiring full-time employees.

The True Cost of Hiring Full-Time Employees

When thinking about the cost of hiring, most CEOs and business owners immediately focus on salary and benefits. But in 2023, compensation costs increased by almost 5%, and benefit costs saw a 4% hike. While that may feel like the price of doing business, there are other hidden costs associated with hiring that can impact your bottom line.

Here are three key hiring expenses that can affect your profitability more than you might realize:

1. The Cost of Recruiting

Recruiting involves several "hard costs," like posting job listings, conducting interviews, performing background checks, and verifying qualifications. Depending on the position, recruiting costs can range from $7,500 to $28,000—especially during a labor shortage. Cutting back on recruitment efforts to save money could lead to even higher costs in the long run if you end up with unqualified candidates or a poor hiring fit.

Why This Matters:

Recruiting is essential, but it can be a financial drain. With high competition for talent, these costs can add up quickly, stretching your budget thinner than anticipated.

2. The Cost of Onboarding

Onboarding and training new employees are mandatory for productivity, but they come at a price. In 2015, the average cost of onboarding was $1,300 per employee, and that number has risen significantly in recent years. These “soft costs” now make up nearly 60% of the total hiring expense.

Onboarding includes training time, providing tools, access to company systems, and educating employees on company policies. Plus, there’s the lost productivity as new hires take time to ramp up to full efficiency—sometimes taking several months before they reach the productivity level of the person they replaced.

Why This Matters:

Onboarding doesn’t just cost money; it costs time and productivity. That lag can slow down your business, impacting both efficiency and profitability.

3. The Cost of Employee Turnover

Employee turnover is a significant expense. Despite the end of the Great Resignation, over 4 million people left their jobs in 2022. Replacing an employee can cost anywhere from 50% to 200% of their annual salary, depending on the position and the training required.

For instance, if a $60,000 salaried employee leaves, it could cost you between $30,000 and $120,000 to replace them—before you even start paying their replacement’s salary. And if turnover becomes a trend, it can create a domino effect, where other employees also leave due to increased workloads or dissatisfaction.

Why This Matters:

Employee turnover isn’t just disruptive; it’s expensive. Losing key talent creates both direct and indirect costs that can hurt profitability.

Are Hiring Costs Eating Into Your Profits?

You may not think hiring costs are driving down your profits, but there’s only one way to be sure: calculate the actual costs. Here’s how you can get a clearer picture:

Key Data Points to Consider:

• Cost per hire: Calculate an average based on recent hires, including recruitment, training, and onboarding costs.

• Time to fill a position: Measure the time it takes to go from an open position to a signed offer. Delays in filling roles can significantly slow down your growth.

• Employee turnover rate: Calculate the percentage of employees leaving your company voluntarily to understand how often you’ll need to reinvest in hiring.

These metrics will give you insights into how much your hiring processes are costing your business.

Review Your Hiring Success

Once you’ve gathered the hard numbers, assess the impact that hiring has on your business in terms of productivity and long-term success:

• Productivity impacts: Are new employees taking too long to get up to speed? Is extensive training needed to fill skills gaps? These could signal poor hiring decisions or gaps in your recruitment strategy.

• Quality of hires: Are you hiring top talent, or are your new employees negatively affecting your team’s culture or productivity?

• Ongoing performance benchmarks: Use KPIs or other benchmarks to track how hiring affects your bottom line. If new hires don’t contribute to growth or profitability over time, it could be a sign of hiring inefficiencies.

A Smarter Solution: Fractional Support

Instead of facing the high costs and risks of hiring full-time employees, consider whether fractional support is a better option. Do you really need an in-house team member, or could outsourcing your administrative or operational needs help you save?

A fractional executive assistant could be the ideal solution. By hiring fractional talent, you pay only for the hours you need, giving you flexibility and cost control.

Benefits of Fractional Support:

• Immediate support: Get help quickly without the long recruiting, interviewing, and onboarding processes.

• Access to top-tier talent: Work with highly skilled professionals who may not be available for full-time roles.

• Scalability: Easily adjust the level of support based on your business needs without worrying about long-term contracts or benefits.

Instead of waiting to hire in-house when your budget allows, you can get the support you need now and focus on growing your business.

At The Vantage, we’ve seen a significant increase in companies looking for fractional executive assistants to streamline their operations and reduce costs. If this sounds like you, reach out today—we can help you find the right talent to grow your business without the hiring headaches.