5 ms·

It is super expensive to hire someone. The costs are enormous. Let's take a hire that will make $10,000 per month, nice round number. Someone in HR has to wri

It is super expensive to hire someone. The costs are enormous. Let's take a hire that will make $10,000 per month, nice round number. Someone in HR has to write the job description. This takes the HR person's time, the hiring manager, the hiring manager's boss just to get the information for a job description Job description cost with hiring manager: $500 Job description cost with hiring manager's boss: $500 HR person's time to talk to hiring managers and to write the job description: $1000 Job board postings: $250 Headhunters if found through them: $30,000 (3 month's salary) Corporate career page posting and social media posting of job description: $500 Interviewing with multiple people, even a few rounds: $5,000-$10,000 Hring temporary/freelance person to cover work to be done by permanent hire before new employee leaves prior job and starts with yours: $20,000 Filling out paperwork and miscellaneous expenses: $1,500 Employee takes 3 months getting up to speed and not really producing, but still being paid: $30,000 Employee decides the job is not a good fit for him or her and quits 9 months later: $90,000 wasted. *Total cost to hire and then the person quits:* $184,250 wasted Additional cost: cost of not getting work done because of hiring errors, that needs to be done: ???? you tell me. A lot. So a company hires 50 people and 20 quit because the were not vetted propertly: that is $3,685,000 in wasted money. Now, realize that this $3,685,000 is in after tax dollars, so if the company's profit margin is 15%, it takes $24,566,667 in product and/or service sales to cover those wasted hiring expenses. Because those 20 employees were fired or quit, it will take another $24,566,667 in sales to cover the next round of hiring, or almost $50,000,000. If those new 20 hires, if 8 of them quit...well, the game goes on and on. So, a company best be damn careful in one's hiring practices. (numbers above might or might not be accurate, but it doesn't matter, that's not the point. The point is that it costs a lot of money to hire and then lose an employee after a short time period due to employee quitting, or getting fired for incompetence, anger issues, harassment problems, or whatever. Hiring highly paid employees is a dangerous game. This is from the company's perspective, not yours. But if you started your own company, would you want to pay $50 million for bad hiring decisions? No. You would make double-damn sure there would be a lot of vetting processes. And realize, this is not about you for anyone reading this. It's about the statistics over dozens of hiring decisions.

swader999 4y ago
It can go like that. A lot of other times, a trusted dev brings their buddy on after an hour talk with the team and it just works out because one person has directly worked with them in the past and two others have a friend that also vouches for them. Seen this most places I've worked.
- As_You_Wish 4y ago
  Sure. No question about that at all. That's why companies reward employees who bring in new people and they get hired. That's difficult to control, though, that's the problem. And especially if a company wants to hire 15 devs this quarter, who have the required skill set. If you have a small company with 5 devs, and it hires 1, maybe 2 new devs over the course of the year and there's no real time frame on finding a new dev, you only hire when you find a good person, well, that is a different scenario entirely. But like most things, that is only an ad hoc solution. What do you do, as the business owner asks the devs for referral and there are none? What do you do? You have to go to the open market. And as I wrote in my last post:"It's about the statistics over dozens of hiring decisions." So not just a hire here and there, but for a sytem. I work a lot with people in the trades - electricians, plumbers, dry wallers, insulation installers, etc. Man, you think there's a shortage in devs??? Nobody, but nobody, is going into the trades anymore. There's no one to hire, no one to refer.
monster_group 4y ago
Companies give tiny raises to loyal employees. If hiring is so expensive why don't companies make effort to retain employees by giving them raises that make their compensation at least at par with that of the new hires.
- As_You_Wish 4y ago
  Because human nature favors inertia. Some may leave because they don't get pay raises, but most people hate change. So they stay. And the company gets higher profits by keeping payroll down. However, if every single person quit exactly at performance review time, every single employee, due to not keeping up with new hires or comparable pay to the industry, they would change. But they don't do this because all employees don't quit. It's a simple calculation. How many people will quit? if you have 100 tech people, getting paid $100,000/year each, that is 10,000,000 per year. Give them 25% raise and then the payroll goes up $2,500,000 per year, and you have to pay that the next year, too, and the next year, and the next year. Plus bonuses and all that. Payroll taxes go up, too. So a lot more expenses. Also, if you give people a 25% raise, what do you give them the following year and the one after that? There's all kinds of psychological things going on in the game. You give someone a 25% raise this year and a 1.5% raise next year, nobody is going to look at it as bringing them on par to others, they are going to look at being ripped off because they got 25% last year and only a measly 1.5% this year. "Why didn't I get at least 12%???" But if there are low raises, and 2 people quit because they are not getting paid enough, then the company hires 2 more people to replace them, that's going to be $350K to hire two new hires.

swader999 4y ago

It can go like that. A lot of other times, a trusted dev brings their buddy on after an hour talk with the team and it just works out because one person has directly worked with them in the past and two others have a friend that also vouches for them. Seen this most places I've worked.

As_You_Wish 4y ago
Sure. No question about that at all. That's why companies reward employees who bring in new people and they get hired. That's difficult to control, though, that's the problem. And especially if a company wants to hire 15 devs this quarter, who have the required skill set. If you have a small company with 5 devs, and it hires 1, maybe 2 new devs over the course of the year and there's no real time frame on finding a new dev, you only hire when you find a good person, well, that is a different scenario entirely. But like most things, that is only an ad hoc solution. What do you do, as the business owner asks the devs for referral and there are none? What do you do? You have to go to the open market. And as I wrote in my last post:"It's about the statistics over dozens of hiring decisions." So not just a hire here and there, but for a sytem. I work a lot with people in the trades - electricians, plumbers, dry wallers, insulation installers, etc. Man, you think there's a shortage in devs??? Nobody, but nobody, is going into the trades anymore. There's no one to hire, no one to refer.

monster_group 4y ago

Companies give tiny raises to loyal employees. If hiring is so expensive why don't companies make effort to retain employees by giving them raises that make their compensation at least at par with that of the new hires.

As_You_Wish 4y ago
Because human nature favors inertia. Some may leave because they don't get pay raises, but most people hate change. So they stay. And the company gets higher profits by keeping payroll down. However, if every single person quit exactly at performance review time, every single employee, due to not keeping up with new hires or comparable pay to the industry, they would change. But they don't do this because all employees don't quit. It's a simple calculation. How many people will quit? if you have 100 tech people, getting paid $100,000/year each, that is 10,000,000 per year. Give them 25% raise and then the payroll goes up $2,500,000 per year, and you have to pay that the next year, too, and the next year, and the next year. Plus bonuses and all that. Payroll taxes go up, too. So a lot more expenses. Also, if you give people a 25% raise, what do you give them the following year and the one after that? There's all kinds of psychological things going on in the game. You give someone a 25% raise this year and a 1.5% raise next year, nobody is going to look at it as bringing them on par to others, they are going to look at being ripped off because they got 25% last year and only a measly 1.5% this year. "Why didn't I get at least 12%???" But if there are low raises, and 2 people quit because they are not getting paid enough, then the company hires 2 more people to replace them, that's going to be $350K to hire two new hires.