Pre-employment screening has certainly become a must for Human Resource professionals and business owners. Losing an employee is already a pricey prospect. However, when you add in the cost of hiring and training a replacement, it can become a serious drain on company finances. This makes it incredibly important to heavily screen potential employees. Therefore, you lessen the chance of having to replace them.
On average, it costs around $25,000 to replace a mid-level management employee. In any case, the cost for replacing other employees varies depending on compensation, training, and education.
One Center for American Progress study broke the costs down like this:
- For high-turnover jobs with compensation under $30,000 a year the cost is the lowest, coming in at about 16% of annual compensation. This leaves you with a max cost to replace a comparable employee of about $4,800.
- If you’re replacing a position that requires a high-level of education or training, then expect to pay around 20% of the employee’s salary. This figure gives you a $8,000 cost to replace an employee making $40,000 a year.
- Replacing high level executive employees can cost large corporations as much as 213% of that employee’s salary. With that in mind, you would have a cost of around $200,000 for replacing a CEO or VP making $100,000 per year.
WHAT WE OFFER
To summarize, replacing an employee is costly. Anything you can do to hire the right replacement the first time should the highest priority.
To help the wary hiring manager, we offer full background investigations that include a detailed look into an applicant’s employment and education history. We not only verify criminal background information, but we also verify professional qualifications and credit history. Our investigation goes well beyond the typical range of information brought to you by simple online background checks. We delve deep into an applicant’s background and can offer custom solutions that are sure to meet your needs.