Print   RSS

The Real Cost of Replacing a Full-Time Employee

Hayley Granton

October 24, 2013

All across the country, businesses are dealing with tough situations on a daily basis. Some of them are losing money, but some of them are on the brink of losing full-time employees. As you try to decide whether to fire a person or not, you should consider what the real costs are of letting go of this particular individual. 

The Work You Lose
Before you fire this person, you should consult with a professional  from a firm like ADP Solutions. Working with a professional in the field can help you see what you might stand to lose by firing the employee. For example, let's say that you are considering firing this person because he or she is always late. However, despite the lateness, this individual always manages to perform more work than the other employees. You could lose some of your output and productivity by firing this individual. 

Searching to Fill The Spot
Of course, since you are getting rid of one person, you need to find another individual who can take his or her role. If this person did a lot of the company, then you might even need multiple people who are capable of doing so. Of course, you'll eventually need to pay for the employee's salary, but right now, you need to allocate some of your current staff's time to finding this person. Depending on how rigorous of a search you are looking at, the productivity of your company could fail during this time. 

Hiring New Employees 
After you have gone on the search for someone, or multiple people, to fill the role, you need to understand what the rights are for those individuals. Understanding ACA can help you to do so. When the new person or persons enters onto the staff, you may be required to provide them with certain benefits. Working with your accountant to see how much this will really affect your finances is extremely important. 

Meeting Salary Demands and Negotiating
In some fields, employees can stand to be competitive. When they come into your business, they might try to really negotiate and to obtain a much higher salary than the person who was previously in the position. On top of that, they could be negotiating for a certain number of vacation days and the like, so this new employee could cost you a lot more than the old one.

Looking at people as numbers is very difficult, but it is a major part of being the owner of a company.

 Feedback   Submit Article