In a recent conversation with Chuck Ros, the CEO of Emerald Software Group, he reminded me of a survey conducted by the Aberdeen Group.  The survey concluded that the average cost of onboarding a new employee is approximately $110.  Coming from a Human Resource background, I was not at all surprised.  As a matter of fact, the figure seemed a bit low to me, but let’s assume for a moment that the Aberdeen figure is correct and attempt to determine the cost based on a few practical assumptions:

$28.50 – The Average Cost of Standard FedEx Delivery with every paper form that you could ever imagine and more!

$30.00 – Administrative cost associated with preparing the new hire package (i.e. typing the Offer Letter, gathering required forms, stuffing the envelope, requisitioning new employee items for the first day, etc.)

$15.00 – Administrative costs associated with data entry, employee records retention/filing, and error resolution.

$30.00 – Employees who complete manual paperwork and are not engaged in their core job function.

The sum of the individual costs above get us really close to the $110 total that Aberdeen researched and calculated.  My total does not even include the cost of possible fines from federal and state governments that penalize companies for a failure to collect valid forms.  Often times, these penalties come as a surprise to  companies who otherwise thought that they were complying with all of the legal requirements for each form.  My estimate also filters out the wasted time spent completing manual paper forms on the first day of work.

Now, I’d like to move on to the monthly and annual costs of onboarding a new employee.  Let’s assume that you are working for a company that hires 100 new employees per month.  If my math is correct, that’s a whopping $11,000 per month or $132,000 per year, just to onboard your new hires!  If you are a wise Human Resources professional, you’ll determine a way to reduce the costs associated with hiring a new employee. What if you could reduce the cost to $66,000 per year?  Companies are able to completely automate their onboarding process through a world class SaaS provider,  Emerald Software Group.  While most companies in the onboarding business emphasize the acculturation of a new associate, Emerald Software Group focuses on the transactional aspect.  For example, Emerald Software has a State W-4 Tax library for all 50 states and the District of Columbia.  In addition, the Federal W-4, Form I-9, and Form 8850, have all been automated.  By incorporating these forms into the paperless onboarding process, you can be assured that your Human Resources department will always have valid forms and steer clear from errors and omissions.  After a recent implementation with a client in all 50 states, an extremely excited HR representative sent us the following note and with this, I will sign off until next time:

“I can now leave at a decent time every day!  All of our forms are completed in record time and the employees are very complimentary of the AllegroHR onboarding system.  We spoke with several onboarding providers and none of them had the transactional capabilities that you have.  Your automated state tax library alone, made the project worthwhile.  Thank you!  Thank you!  Thank you!!!”