It's a dilemma every recruiter has faced now and again — should you hire an experienced professional for your team or a young graduate and train them? Both options have pros and cons, and one crucial factor to think about is the cost.
You can add an expert to your team who will require minimal training, and they will land on their feet running. At the same time, an expert will demand a high salary package.
On the other hand, you can find a suitable fresh graduate for much lower compensation, but they typically will need extensive training for a while to grow into their role.
So who will cost more over time? Our calculator will help you find this answer for your specific scenario. This should inform you to take the best course for your company.
How much does hiring an experienced person cost?
To answer this question, let's consider the different costs involved in hiring an experienced worker:
Salary: This is the most visible cost in any recruitment. Typically, experienced people will demand a higher salary.
Hiring costs: This includes the different hidden costs incurred during recruitment, such as:
The actual recruitment process, from posting a job vacancy to conducting interviews to hiring an employee.
Onboarding a new employee can take a few hours to many weeks, depending on the job. Besides, the employee will require time to adjust to the new company's culture and practices.
The formula to quantify the cost incurred in hiring an experienced person would be:
- — Cost incurred by hiring an expert;
- — Monthly compensation for the expert;
- — Period of time (in months) the expert works at the company; and
- — All the hidden costs involved in hiring.
How much would hiring a fresher cost?
Apart from salary and hiring costs, a fresher will also incur training costs during their training period. Training costs include the lectures, the equipment used, loss of billable hours, etc.
Although you can hire them for a lower salary, training a fresher requires significant time and resources. Despite this high price, investing in a trainee usually proves beneficial in the long run.
We can quantify the cost incurred in hiring a fresher using the formula:
- — Cost incurred by hiring a fresher;
- — Cost incurred in training a fresher; and
- — Amount of time (in months) the fresher needs to be trained.
How to use this calculator
Our calculator is here to help you decide whether you should hire an experienced professional or a graduate/trainee based on the cost factor:
Enter the monthly salary and hiring cost of the expert.
Provide the tenure period in months. The calculator will show you the cost incurred in hiring the expert for the given tenure period.
Input the monthly salary and hiring cost of a fresher.
Provide the training cost per month and the training period (in months) for a fresher.
The calculator assumes that both the expert and the trainee serve for the same tenure period. It will show you the cost incurred in hiring a fresher for this tenure period.
Furthermore, the calculator will also tell you who costs more and by how much!
To help you visualize the difference in cost incurred over time, the calculator will display a chart showing the cost incurred over a year by both the trainee and the expert.