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Employee Benefits

Employee Benefits Companies must consider many personnel costs. These costs include employee benefits, such as health insurance and vacation days. What are other employee benefits?. Lesson Objective Calculate the cost of recruiting new employees. Content Vocabulary. recruiting

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Employee Benefits

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  1. Employee Benefits Companies must consider many personnel costs. These costs include employee benefits, such as health insurance and vacation days. What are other employee benefits?

  2. Lesson Objective Calculate the cost of recruiting new employees. Content Vocabulary recruiting The act of soliciting qualified people to work for a company. • recruiting

  3. Example 1 Talbot Manufacturing Company is searching for a person to head its production department. The personnel department placed advertisements for a total cost of $6,495, and employed Empire Executive Search Company to locate candidates.

  4. Example 1 (cont.) Empire recommended Alice Welch, Tomas Valdez, and Cleveland Adams. Talbot paid for the candidates travel expenses (i.e., transportation, lodging, and meals) for interviews. Alice Welch Total travel expenses: $517 Tomas Valdez Total travel expenses: $735 Cleveland Adams Total travel expenses: $674

  5. Example 1 (cont.) After the interviews, Talbot hired Cleveland Adams at an annual salary of $154,900. Talbot paid these expenses to hire him. Moving expenses $3,600 Sale of home (real estate broker’s fee) $9,470 Empire’s fee (25 percent of Adams’s first salary) $38,725

  6. Example 1 Answer Step: Find the total recruiting cost. Advertising + Interviewing + Hiring Expenses Expenses Expenses $6,495 + ($517 + $735 + $674) + ($3,600 + $9,470 + $38,725) $6,495 + $1,926 + $51,795 = $60,216

  7. Example 2 A financial services firm searched and found a senior-level investment banker. Advertising for the position totaled $12,500. The firm narrowed the search down to 3 finalists. It spent $3,890 on interviewing expenses.

  8. Example 2 (cont.) It decided to hire Jane McNally. The firm paid $5,000 in moving expenses and a 6 percent realtor’s fee on the selling price of her home. The home sold for $348,000. What is the total recruiting cost?

  9. Example 2 Answer Step: Find the total recruiting cost. Advertising + Interviewing + Hiring Expenses Expenses Expenses $12,500 + $3,890 + [$5,000 + (6% × $348,500)] $12,500 + $3,890 + [$5,000 + $20,910] $12,500 + $3,890 + $25,910 = $42,300

  10. Practice 1 Trebor Technology is recruiting for a programmer position that pays an annual salary of $38,000. The company spends $859.50 in advertisements and hires the Quality Employment Agency to search for candidates.

  11. Practice 1 (cont.) Quality’s fee is 25 percent of the first-year salary. Trebor spends $1,287.98 on interviews and hires one of Quality’s candidates. What is Trebor’s total recruiting cost?

  12. Practice 1 Answer $11,647.48

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