CH 13 Personnel 13.1 Recruitment. Recruiting is the act of soliciting qualified employees to work for your company. Recruiting costs include such things.

CH 13 Personnel13.1 Recruitment

13.1 Recruitment

• Recruiting is the act of soliciting qualified employees to work for your company. Recruiting costs include such things as advertising expenses, interviewing expenses, and hiring expenses.

What industries would have a high recruitment cost? Why?

Example of industries: technology, manufacturing, health, etc.

Source: http://online.wsj.com/article/SB10001424052970203764804577056603280231204.html

For Smaller Firms, Recruiting Costs Add Up(WSJ article)

Large firms see a significant scale advantage when it comes to recruiting costs per new employee, according to a study from Bersin & Associates, a human-resources advisory firm.

Companies with more than 10,000 employees world-wide pay a median figure of $1,949 per hire, compared with midsize companies, which pay $3,632, and small firms, which pay $3,665.

To calculate the cost per hire, 414 companies added up all their spending on internal recruiting staff, third-party agencies, company career websites, applicant tracking software, job-listing services, college recruiting, employee referral programs plus other recruiting-related expenses—and divided that number by their total hires over the preceding year.

Advertising Expenses + Interviewing Expenses + Hiring Expenses = Total Recruiting Cost

Welch Associates is seeking a Senior Business Analyst. Advertising costs for the position were$3,275. They used an employment service in their placement search that charged a 25 percent feeon the first year salary of $80,000. Interviewing expenses for candidates totaled $2,835. Hiringcosts included moving expenses of $4,750 plus a 5 percent broker’s fee on the sale of the newemployee’s house. The house sold for $175,000. What are Welch’s total recruiting costs?

What are some ways to decrease the costs of recruitment?

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Outside hires typically cost more.

Reduce employee turnover.

Reduce costs

Recruitment Costs (continued)

Luxbrite Corporation hired Susan Phillips at an annual salary of $62,500. Advertising costs forthe position totaled $2,320. The employment agency’s finder’s fee is 20 percent of the firstyear’s salary. Interviewing costs were as follows: Susan Phillips $237 and Hal Oberlan $354.

What was the total recruiting cost?

Recruiting Review-BWNewtell Agency hired Sylvia Axton as its new Director of Accounting Services at an annual salary of $125,000. Executive Services charged a fee of 25percent of the first year’s salary to help find candidates. Local advertisements totaled $1,389.Newtell also paid moving costs of $3,599 for Axton plus a 4 percent broker’s fee on the saleof her $220,000 home. Interviewing costs for Axton and 2 other candidates totaled $2,337.What were the total recruiting costs to fill the position?

$47,375(125k *.25)+$1,389+ $3,599+ (220k*.04)+$2,337

13.2 Salaries

Big idea: Why are wages and salaries so important to job growth?

http://blogs.wsj.com/economics/2013/06/27/analysis-need-strong-increases-in-wages-and-salaries/?KEYWORDS=wages+and+salaries

NEW VocabularyA salary scale is a table used to compare wages for different jobs at a company. This allows you to estimate cost-of-living adjustments, which are raises in salary to keep up with inflation, and merit increases, which are raises in salary for superior job performance.

Salary Scale

Josiah Freeman is employed as a Senior Business Analyst, Level 1. His company has decided to give all employees a 2.5 percent cost-of-living adjustment. In addition, it has awarded Freeman a 2.75 percent merit increase.

Present Salary + Cost-of-Living Adjustment + Merit Increase = New Salary

1. Find the present salary.

$52,000

2. Find the cost-of-living adjustment.

$52,000 2.5% $1,300

3. Find the merit increase.

$52,000 2.75% $1,430

Present Salary Cost-of-Living Adjustment Merit Increase New Salary

$52,000 $1,300 $1,430 $54,730 new salaryx

Bill Rawls earns an annual base salary of $27,500 and 2.5 percent commission on all sales. His employer is giving everyone a 2 percent cost-of-living adjustment. Rawls will also receive a 3 percent merit increase. What is his new salary if his sales for the year total $130,250?

Bill Rawls earns an annual base salary of $27,500 and 2.5 percent commission on all sales. His employer is giving everyone a 2 percent cost-of-living adjustment. Rawls will also receive a 3 percent merit increase. What is his new salary if his sales for the year total $130,250?

13.3 Employee Beneftis

Employee Benefits• The company you work for may offer employee benefits,

such as health insurance, life insurance, and paid vacations. The total of these benefits may be calculated as a percentage of annual gross pay.

Find the rate of benefits.Avian Robles is employed as a Senior Business Analyst with an annual salary of $52,000. Hisannual employee benefits include: 3 weeks paid vacation; 10 paid holidays; 5 sick days; paid healthinsurance at $250 per month; and unemployment insurance at 4 percent of gross salary.

Find the weekly salary and daily salary.Find the total benefits.Find the rate of benefits.

Find the rate of benefits.Avian Robles is employed as a Senior Business Analyst with an annual salary of $52,000. Hisannual employee benefits include: 3 weeks paid vacation; 10 paid holidays; 5 sick days; paid healthinsurance at $250 per month; and unemployment insurance at 4 percent of gross salary.

The total benefits=$11,080

Rate of Benefits = Total Benefits / Annual Gross Pay$11,080 / $52,000 = 21.3% rate of benefits