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What is the True Cost of Hiring and Onboarding?

What is the true cost of Hiring and Onboarding?
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Bringing new people into the team is always exciting! When running a business, it takes money to make money. You make spending decisions every day for the betterment of your company. Hiring and onboarding new employees is one such continuous investment, a company makes to counter employee turnover and support growth.

Especially during the times of change (such as COVID), hiring and onboarding faced challenges that were never witnessed before and it has changed the expectations and outcomes from these processes. The process of onboarding is now required to be more streamlined and equipped with technology that ensures nothing gets skipped or missed.

If you want an overview of overall processes, you can always refer to the article "Overview of Hiring and Onboarding".

The simple and intuitive formula used to calculate the average advertising cost-per-hire based on the cost-per-hire algorithm, created by the Society for Human Resources Management (SHRM) is as follows:

CPH = (A + B ) / Cwhere

  • A: External Costs
  • B: Internal Costs
  • C: Total Number of Hires
  • CPH: Cost Per Hire
  • The True Cost On Hiring and Onboarding  

Job Portals

Nothing comes free these days. Whether you are using Indeed, Carrier Jet, ZipRecruiter, Google Jobs,, Monster, LinkedIn, or campus placement as a means to hire top talents, you will have to pay the price from your company’s account. ZipRecruiter is one of the most popular boards out there, and its pricing is slightly lower. It starts at $249 for one month, for 3 positions. However, it only allows one user per account. If you want to be able to download resumes too, the price bumps up to $349 monthly

LinkedIn uses pay per click model for the job ads that you place on this social media channel. You will be charged $1.20 to $1.50 per click on your job advertisement. Similarly, Dice charges $395 for one job posting that will remain active for 30 days. Monster charges $375 for 60 days.

In ClayHR you can create your own job board for your career website that can be used to attract candidates and track their progress in the hiring process.

*Almost 75 percent of respondents reported using job boards*

Onboarding and Training

Onboarding requires a lot of paperwork–benefits enrollment, tax forms, employee handbooks, NDAs, arbitration agreements, and so on. The team manager spends some time every day on the recruit to help him or her understands his or her work and develop compatibility with the team. From form filling, document collection to preparing salary slips, onboarding a new employee also adds to the accounting costs.

So how to calculate the cost of onboarding a new employee? If you put a dollar value against each process – form filling, document storage, specific job role training, stationery, induction hours, etc. – you will find that you are spending 76.42$ on onboarding and training alone.


The average annual cost of training and developing a new employee is just $1,208. Turns out, training current employees is much more cost-efficient than hiring new ones. The averages annual cost of training and developing a new employee is just $1,208.

Background Checks

Once you’ve found someone you want to hire, it’s safe to practice to learn more about them before making an offer. This is why it’s useful to run background checks for prospective employees.

You can check for anything from verifying their education, previous employers, to criminal databases. One of these checks can cost as little as $5 and as much as $80 per single applicant, depending on how detailed you want to go.

Approximately one-third of respondents reported spending less than $50 in advertising costs to recruit each new hire, while the vast majority of respondents (78 percent) spend less than $500.

Average Cost per Hire

Average Cost-per-Hire

Whether you prefer to “onboard” or “integrate” employees, it’s clear that there isn’t one path to successfully welcoming new hires. Despite this, taking a personal and compassionate approach will ensure that your onboarding experience won’t push a person out the door prematurely.

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