If you’re in a leadership role, you have a good idea what it costs to pay employee wages and benefits. But do you know that these numbers make up only about 40% of your total workforce cost?
The total cost of your workforce could be 1.5 to 3 times higher than what appears on your financial statements.
Achieving an efficient, cost-effective workforce is a complex issue—now more than ever before. Why? We are seeing some consistent trends across the country.
• Rising talent acquisition costs. The multiple factors that go into talent acquisition can really add up: third-party agency fees, long fill times, advertising agency fees, job fairs, online job board fees, travel cost of applicants and staff, relocation costs, recruiter pay and benefits.
• Difficulty attracting talent. According to the Bureau of Labor Statistics, there are 8.1 million open roles in the U.S. today, the highest number in 20 years. With so many open roles, job seekers can afford to be choosy.
• Difficulty retaining talent. In a job market such as this, new employees who don’t feel valued won’t stick around long. It costs about 25% more to hire versus retain, so anything that improves retention deserves your attention.
• Major shifts in the marketplace. Rapidly advancing technology and market uncertainty are two factors that affect nearly everything else, from rapidly shifting skillset needs to supply chain interruptions.
The first step in optimizing, even lowering, your workforce cost, is knowing what it actually is. Manpower has stepped into this knowledge gap with the Total Cost of Workforce calculator.
The average company’s costs fall into 3 main buckets:
• Labor – 40%. These include wages, benefits and talent acquisition costs
• Opportunity – 35%. Costs such as overtime, turnover, unfilled orders and supervisor time
• Hidden Costs – 25%. Items like safety, compliance, unemployment and training
While many companies have an understanding of their labor costs, it’s the opportunity and hidden costs that often are overlooked—but have the power to make or break a business.
The Manpower Total Cost of Workforce calculator will uncover opportunity and hidden costs, and combine them with your known labor costs. The Total Cost of Workforce Calculator uses deep insights gathered from your business and compares them to standard workforce costs around the industry to deliver a clearer picture of what you’re really spending.
If optimizing, even lowering, your workforce cost is imperative for your organization, calculating what your workforce is actually costing you is your critical first step.
Your Manpower workforce expert will walk you through the whole process, explain your results, and then work with you to consider the strategies that will work for your organization to improve productivity and lower costs.
Knowing the true total cost of your workforce drives engagement and improves productivity and performance. Learn more about Manpower’s Total Cost of Workforce Calculator today.