Have you recently been solicited for a work-at-home job? Click here.


Employer Portal

How to Determine the ROI of a New Employee

Are you looking to hire a new employee, but need to justify the return on investment (ROI) first? If so, you’re not alone. Well-run businesses always make sure that the ROI justifies the expense.

So, the question really becomes: How do you best justify ROI? Here are three steps to accomplish this goal.

1. Choose a Measurement

The first step is to choose a method of measuring ROI. One frequently used method is a cost-benefit analysis. If you hire a new person, calculate the cost vis-à-vis the expected benefit.

It helps to quantify expected benefit with specificity. Will they increase sales by x amount, for example? Will they ensure more IT coverage in a way that will make online operations work more seamlessly to drive customer retention up? Will they enlarge the role of cloud computing to drive more customers?

2. Have a Clear Role in Mind

As you assess your business or department, define the role you want the new employee to play. Why? Because not defining roles and responsibilities is a peril. First, if you have an undefined sense of needing new people, you won’t be able to define the “benefit” part of any cost-benefit analysis.

Second, though, employees who don’t have clearly defined roles and responsibilities may be more prone to underperform or even to fail. A bad hire is definitely not going to have a good ROI – and may even impede your ability to get new hires in the future. If you need a software developer, for example, you need to define the roles and responsibilities they will have, not expect them to also do expanded social media analytics.

3. Tabulate All Costs

When counting up the costs, be sure to tabulate all of them. There are obvious costs and hidden costs with every hire. The obvious costs are salary and any benefits, for example. But hidden costs center around the hiring and training process.

The hiring process takes time and person-hours. Development of the job description, finding the appropriate channel for posting, and interviewing all take time. Onboarding will take time.

The training process will take time, and until it is done, the productivity of new hires is likely to not reach its peak. Factor this in as well.

Tabulating the costs effectively will help you in the long run as well as the short term. You will learn how to estimate the cost-benefit analysis more effectively.

An Experienced Staffing Agency for Your Needs

Recruiting and hiring can be a drain on your productivity and ROI until it is done. Working with an experienced staffing agency can increase the ROI by ensuring the recruiting and hiring process is optimized. Nesco Resource can help. We are experts in the engineering and IT fields. Contact us today to learn more.

Previous Posts

Tips for Hiring the Best Machine Operators Increase the Value of Business Intelligence in 2018 The Biggest IT Issues of 2018 The Top Four Benefits of Enterprise Resource Planning (ERP) Software Strategies for Hiring the Best Electrical Engineers How to Recognize Early Project Warning Signs How to Balance Productivity and Fun in the Workplace How to Increase Candidate Interest in your Employment Opportunity Here's What you Need to Know Before Hiring a Temp Employee The Advantage of Using Project Office Management (PMO) Why Business Intelligence Matters to Your Organization Tips for Hiring the Best Candidate, Not Just Someone Who Interviews Well Follow These Steps to Simplify Your Hiring Process Strategies for Improving Workplace Communication Ways to Effectively Create Employee Development Plans Tips for Planning Your Business Goals for 2018 Tips for Identifying Performance Problems in the Workplace Top Four Ways to Reduce Stress in the Workplace The Top Technology Trends for 2018 Why Working from Home is a Crucial Perk to Offer How to Spot a Bad Candidate so They Do Not Become a Bad Hire Top Hiring Trends That Are Hot, and Those That Are Not How to be a Leader Instead of a Boss How to Make Sure Your Employees are Happy and Productive Turning Down Job Applicants the Right Way Managing Employees Who Don't Get Along The Importance of Employee Recognition You Want to Hire the Best Engineers, Don't You? Why Regular Staff Meetings Are a Must The Importance of a Strong Employer/Employee Relationship Should You Choose a Candidate with More Experience or More Degrees? Leadership Qualities to Promote on Your IT Team How Temporary Summer Help Can Be Beneficial to Your Business How to Handle an Employee Who Takes Credit for the Work of Others Why It Is Important to Get to Know Your Temporary Employees Three Ways to Offend a Potential Candidate During an Interview Why You Should Consider Hiring a Social Engineer Candidate Make Your IT Team Feel Valuable How to Hire a Superstar Engineer How to Make Sure Your Candidate is a Cultural Fit How to Determine if a Temp Worker Will be Reliable Interviewing for IT Independence Leading a Team of Engineers Disruptive Technology & IT Deals H1B Visa Demand Slips: What Is The Impact on Tech Talent As Companies Negotiate on Disruption; Talent Becomes Even More Important Does Your Company Hold Yearly Safety Reviews? 3 Mobile Phone Policies to Enforce as an Employer Make Your Third Shift Positions More Attractive The Real Cost of Hiring Video: Reducing Temp Turnover 3 Mobile Phone Policies to Enforce as an Employer How To Engage Employees To Do Their Best The Perils of Hiring Fast How to Make Your Employee Onboarding Successful