Not all expenses bring revenue, either directly or indirectly. Therefore, there will be fees used solely for office operations, logistics, after-sales care, and personnel costs. The costs that are thought to be opportunity costs are sometimes the costs that create the least value, not only that, but also cause losses and affect the profits of the business if managers do not pay attention and have a method. effective management. It leads to having to spend a lot of money every year (lost) but the revenue is not commensurate.
One of the biggest culprits is staffing costs. Expenses from recruitment – training – salary bonus to welfare costs. Is a very large number if we do not understand and know how to manage well. This leads to loss of business costs.
Join us today to track down the culprit that causes the biggest loss to businesses every year!
ANNUAL LOST COSTS OF A BUSINESS
1. Recruitment costs
Recruitment costs include advertising costs, posting costs, time costs, fees for the recruitment department, and trial costs.
For businesses that have an administrative – personnel department in charge of recruitment: Expenses include costs for advertising, posting, filtering CVs, and the cost of staff time spent writing articles or interviews. question.
For companies that have to hire external recruiters (Headhunter, Iconnect,…) : Recruitment costs range from 18 – 25% / total annual salary of candidates.
For example: Recruit employees with the number of employees recruited is 6, if the employee is not suitable or does not stick with it for a long time, determine to change about 2-3 times a year, from 12-18 people.
>> The cost of recruitment according to the market is 5 million / person, so the cost to spend is 60 – 90 million. Not to mention hiring leader cost will be higher: 15 million/person. Hiring a director costs up to thousands of dollars/person.
The most important thing is still the high cost of recruitment when hiring a new employee, the impact when recruiting the wrong person, not suitable for the job, has negative effects on both cost and work productivity.
In addition, the cost of time spent on interviews is also a loss of the business quite a lot.
When the directors, Ceo, and Chief of the interview take the time to interview 120 – 180 employees. It will take from 60 to 120 hours. Every hour, the CEO or the head of the MKT department spends time interviewing, it will cost the business 1 million – 5 million.
>> The cost of loss in 1 year is from 180 – 900 million.
2. Loss costs for personnel training
- Input training costs for personnel: Each employee when starting to work, enterprises also need to send people to train in culture, working methods and familiarize themselves with the system to keep up with the work progress.
>> The loss cost here includes the cost of training time (the higher the cost the more people the company hires and replaces); When new to work, because they have to get used to the schedule, the labor productivity of employees is not really good, which also affects business costs. (only get work results equal to 1/2 of familiar employees but pay 80% of salary).
- Periodic training costs: Every year, businesses will lose costs to train personnel, invite training experts or leaders to train individually or in groups, usually spending 200 – 500 hours on training. Regardless of each new employee change, the team leader, director or department head will have to spend time and effort retraining the job.
>> One year the training cost of the enterprise is from 200 million to 900 million.
3. Loss cost – Employee’s salary
Labor productivity when not controlling the quality of employees such as working separately, or doing not the right strengths, inefficient assignment will affect the work results.
Compared with office workers, labor productivity in Singapore is 23 times higher than in Vietnam. Thus, businesses that are only taking advantage of 1/10 of the team’s labor productivity, with a team of 6 people, 60 million salary
>>> Business owners lose 540 million/month, more than 6 billion/year.
If labor productivity is doubled, the work of 2 people can now be done by 1 person. Then the company has saved 1 more quantity (for example, 8 million/person).
>>> Enterprises have 200 employees -> Labor productivity is equal to 400 people >> Save 1.6 billion/month
4. Personnel welfare expenses
Other expenses include travel (3 million/year/person), seat 1.5 million/month, Tet bonus (8 million/year), insurance per employee (15 million/year) costs 20-40 million/year , the average is from 20-60 million/year/person. For businesses with 40-200 employees, the cost per year is 8 billion-12 billion.
If labor productivity is doubled, 1 new person can be as productive as 2 old people
>> 1 year, businesses save 120-160 million (including salary)/employee
>> enterprises with 100 employees, labor productivity x2 >> 1 year save from 2 billion – 6 billion in human welfare costs.
This is a problem that sooner or later, businesses also need to solve. Not only with 1 or 10 employees but with 100, 1000 employees.
MKT Pro was born to solve the recruitment and selection of marketing personnel of enterprises. MKT Pro provides a Marketing Department full of quality personnel from department heads, leaders and marketing personnel for businesses! Offering recruitment and personnel training packages, automated management systems for 10 business owners in July.