The True Cost of Keeping your cleaning in House.

Do you really and truly know how much it costs to hire or replace an employee in your organization? If you are like most, you’re unable to answer that question at this exact moment… and therein is the problem.

When the decision is made to hire a new employee for cleaning or replace one that is leaving, you’re not simply agreeing to pay them a salary and benefits. The additional costs of recruiting and training are probably what come to mind, but trust me, there are many more that have to be factored into the equation. And there are variables involved in calculating the exact cost of a new hire.

The importance of this issue

As an owner or manager in our industry, we work hard to add value to your business by ensuring the upmost in client services and revenue generating systems that will provide your organization the opportunity to sustain and grow.

With the demand for extraordinary services at an all-time high, the need for increased productivity is immeasurable. Therefore, the strategic importance of understanding not only the costs associated with the hiring process, but your ability to find and retain the best people possible, is critical. We have hired, trained and screened a great team of cleaning professionals. To save you time and increase your bottom line.

Actual costs beyond the obvious

When a business decides to hire a new employee, it must consider the costs beyond recruiting and training. We often fail to think through things such as the need to create a new workspace, equipment that might be needed, and in some cases, relocation expenses.

When someone leaves an organization and a replacement is needed, there is also a cost. The tab for human resources’ expenses starts running once an employee announces his/her decision to resign. Much of the expense is in indirect costs such as the loss of training or institutional knowledge, loss of productivity, possible consulting fees, and overtime expense for those covering the vacancy. There is also the cost for time spent organizing their continuation of benefits, conducting an exit interview, meeting with the employee to determine if there’s a retention strategy to persuade him/her to stay at the company, and compensating the employee for unused vacation or sick time.

Think in terms of a project manager leaving your organization. Once his/her resignation is turned in, you would need to develop a targeted recruiting program to find someone with identical skills who can start work right away. This is sometimes easier said than done when the resigning employee has specialized skill sets that are difficult to replace using traditional recruiting methods.

There is no set number on the actual cost of hiring a new employee or filling a vacated position. It depends on the job itself and the benefits that may be part of the overall employee package. Expenses in addition to salary could include health care and/or retirement benefits, taxes, unemployment insurance, and workers’ compensation costs.

Consider this information to help you analyze and determine additional cost factors that apply to your organization.

Recruiting costs start with preparing a job description that accurately reflects the current job duties and responsibilities.

By Contracting out your facilities cleaning needs you will ultimately save time, money and liability to your company. Below is a list of additional costs associated with having your staff clean in house.

Other costs:

1. Recruiting Process Costs

Consider the time spent…

• Formulating and placing the employment ad.

• Sourcing resumes.

• Reviewing resumes.

• Interviewing potential applicants.

• Preparing the employment offer.

1. Additional Screening/Hiring Costs

Consider the cost of…

• Conducting background checks.

• Individual skills assessments.

• Possible travel expenses for new hire or internal hiring manager.

• Possible relocation expenses for new hire.

• Additional bookkeeping: payroll, benefits enrollment, 401k, etc.

• Additional record keeping for federal, state, and local government agencies.

1. Training Costs:

Consider the expense for…

• Orientation and on-boarding, including materials.

• Total time spent in training, including the trainer’s salary.

• Percentage of lost productivity until new hire is productive.

• The amount of time the manager needs to spend with the new hire.

Something to consider

Beyond the obvious “hard” costs associated with advertising, background checks, and interviewing are many other “soft” costs that are often overlooked. One of the biggest is the time involved. All of the steps involved in hiring a new employee or replacing one who has left take time…and time has a cost.

According to an article by Will Helmlinger of The Resource Development Group, “The cost to replace one Customer Service Representative earning $18,000 annually is nearly $58,000.″

A study conducted by the Institute for Research on Labor and Employment, University of California, Berkeley on evaluating the effects of the U.S. Family Medical Leave Act found that “turnover costs for a manager average 150% of salary, including tangible costs of hiring new workers and relocation, and intangible costs such as the new worker’s inefficiency and lost productivity while the job is vacant.”

The obvious next step is to evaluate your in house cleaning employee costs compared to a janitorial service costs which is typically 20-45% lower.