What It All Costs

Features - Recruitment & Retention

Hiring new employees takes time AND money.

July 12, 2018

It goes with employees as it goes with customers: It costs less to retain existing ones than it does to attract new ones. That’s why companies work so hard to create a culture where employees want to stay. Still, whether due to growth or turnover, every company needs to hire at some point.

How much does that hiring cost? We asked survey participants. Half said they spend less than $2,000 to recruit and train a new employee; on average, PMPs said they spend between $1,900 and $2,400.

Of course, retaining requires some spending, too. Eighty-three percent of PMPs said they’ve raised wages in the past year for service technicians. Fewer have raised wages for customer service reps (67 percent), managers (54 percent) and sales staff (39 percent). This may reflect the fact that the majority of PMPs (67 percent) consider the technician spot to be the most difficult position to fill. It also may reflect the mental calculation that the investment into technicians includes a lot of time and training you can’t get back if that employee walks out the door.

Overall, PMPs say that they’ve increased wages to keep pace with cost of living increases (47 percent) and to remain competitive with other pest control companies (40 percent). Some (22 percent) cite the tightening labor market. On average, they plan to raise wages about 4 percent in the coming year.

Editor’s note:

Even though Phil Cooper recently sold his business to Terminix, PCT wanted to share this information because it benefited Cooper Pest Solutions for years and we thought it would be good information for PCT’s readers. To learn more about Cooper/Terminix, see page 30 of the June issue.

The research referenced in the article comes from the 2017 Recruitment and Retention Survey, which was sponsored by the National Pest Management Association, PCT and BASF. It was compiled by Readex Research, a privately held research firm based in Stillwater, Minn.

The survey sample of 10,130 included all emailable contacts in the following two segments: primary company contacts on NPMA’s membership list in the United States and Canada; and recipients of PCT at unique companies in the United States and Canada and with titles of executive, owner, partner, president or technical director.

Data was collected from 828 total responses — an 8.2 percent response rate — from Nov. 1-20, 2017. To best represent the audience of interest, a majority of the results are based on the 676 respondents who indicated their company employs at least one person in addition to the respondent.

The margin of error for percentages based on the 676 respondents is ±3.6 percentage points at the 95 percent confidence level.

Results may not add up to 100 percent in some charts because of rounding.

For additional insights from this research, see PCT’s January 2018 cover story.

Case Study: Cooper Pest Solutions, Lawrenceville, N.J.

How to Recruit Employees for $1,000

Phil Cooper likes to keep recruitment costs at Cooper Pest Solutions to $1,000 per new hire. That’s how much an employee is paid if their referral is hired and stays for a year (paid in increments of $250, with payments at the time of hire and then at six, nine and 12 months), and it’s the goal Cooper has set for other recruits as well. His team has formalized a recruitment process over the past year that helps them stay on track with that goal. Here are the tools he considers critical to their success:

Sales funnel approach. “When you view recruitment like a sales process, it becomes consistent and measurable,” says Cooper. “We set up funnels and then look at the people we bring in from a cost-per-lead standpoint.” What goes into that cost?

  • The dollars spent securing the lead — advertising or referral payments, for example
  • The interviewing manager’s time
  • HR time
  • Testing and screening costs

“If we go over $1,000 per hire, then we start evaluating where the issue might be,” Cooper says. “Sometimes things happen — maybe an employee doesn’t work out, and so those costs get added in with the others, bringing up the average cost — but overall, if that average continues to rise, it’s time to take a good look at where improvements can be made.”

HR excellence. Cooper says that his company’s HR manager and chief talent scout, Francesca Vena, often recruits candidates at a cost as low as $500, because she’s focused, efficient and good at what she does. “The salary and benefits of your HR manager or recruiter factor into the cost of hiring, so you want to make sure they’re doing an outstanding job. Cost-per-hire is one good way to measure your HR success.”

Marketing savvy. Cooper says they get 61 percent of their candidates through ads on Facebook, LinkedIn, Indeed and Craigslist, in addition to radio and outdoor advertising. These ads are developed by Cooper’s creative team and tested prior to launch. “I’m a big believer that you need different types of ads to communicate different messages,” Cooper explains. “We do a lot of A/B testing to see which approach works best for a certain audience, depending on whether we want to focus on millennials, Gen Xers or boomers.”

The author is a PCT contributing writer.