The Cost of Training New Employees

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Keeping costs down in a business and maximizing profit falls to a business owner. A business owner may delegate certain tasks and expectations to employees, but the control over that still resides with the owner. Brandon Frere, successful entrepreneur and owner of several businesses, warns small business owners of the hidden costs of constantly training new employees.

“A business owner has to be able to look at the bigger picture, looking at more than just the face-value facts, and figure out how things work. And then move things around to make them move the way you want,” says Frere. A cycle of new employees means the obvious costs of hiring a new person, such as adding another person to the payroll and what not. If that new employee is replacing a previous employee, the costs may already be more or less factored in. A new employee may, for various reasons, cost a company less because of a lower paycheck than the previous, but that’s just one upfront cost. Being new to a business means not running at optimal levels. In the case of a store, a new employee will take longer to put things away because they are not as familiar with the store. A more experienced employee will not only know better where items are to go, but will also have a better understanding of how a store runs in general. They will be able to more readily guide themselves through their work activities, which keeps things running more smoothly, and doesn’t tie up another employee in training them.

With the understanding that training employees has more than just an upfront cost, business owners may start thinking about how to keep employees around. Paying employees a living wage is a great starting point, but there are more factors to keeping an employee than just wages. A healthy work environment, with managers that get along with the employees under them, and features provided by the workplace that make them feel appreciated go a long way to getting employees to stick around. However, the cost of training new employees shouldn’t have business owners feeling like they can’t get rid of employees that are a detriment to a business. “Doing what is best for a business takes more thought and effort than anyone ever starts off envisioning. There’s always something more to think about, just below the surface. Deciding when to hire and when to fire can be especially tough, but those are the kinds of decisions a business owner is going to have to deal with,” says Frere.


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