A company hires an employee with a family of 3 for a salary of $140,000 over 3 other candidates. If the employee sold her house for $300,000, what is the total recruiting expense?
\begin{tabular}{|l|l|}
\hline \multicolumn{2}{|c|}{ Recruitment Costs } \\
\hline Interview Costs & $2,000 per person \\
\hline Job Posting Fee & $1,000 \\
\hline 1st Year Fee & 10 \% \\
\hline Real Estate Fee & 6 \% of sales price \\
\hline Shipping Fee & $4,000 \\
\hline Family Travel Cost & $400 per person \\
\hline
\end{tabular}
Answer (2)
The total recruiting expense associated with hiring the new employee is calculated to be $46,200. This includes costs for interviews, job postings, first-year fees, real estate, shipping, and family travel. Each of these expenses was calculated based on the details provided in the question.
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Calculate the interview cost: 4 × $2 , 000 = $8 , 000 .
Determine the job posting fee: $1 , 000 .
Compute the first year fee: 0.10 × $140 , 000 = $14 , 000 .
Calculate the real estate fee: 0.06 × $300 , 000 = $18 , 000 .
Determine the shipping fee: $4 , 000 .
Compute the family travel cost: 3 × $400 = $1 , 200 .
Sum all expenses to find the total recruiting expense: $8 , 000 + $1 , 000 + $14 , 000 + $18 , 000 + $4 , 000 + $1 , 200 = $46 , 200 .
Explanation
Calculate Interview Costs First, we need to calculate the interview cost. The company interviewed 4 candidates (the hired employee and 3 others) at a cost of $2,000 per person. So, the total interview cost is:
Total Interview Cost I n t er v i e w C os t = 4 × $2 , 000 = $8 , 000
Job Posting Fee Next, we have the job posting fee, which is a fixed cost of $1,000.
Total Job Posting Fee J o b P os t in g F ee = $1 , 000
Calculate First Year Fee The first year fee is 10% of the employee's salary, which is $140,000. So, the first year fee is:
Total First Year Fee F i rs t Y e a r F ee = 0.10 × $140 , 000 = $14 , 000
Calculate Real Estate Fee The real estate fee is 6% of the sales price of the employee's house, which is $300,000. So, the real estate fee is:
Total Real Estate Fee R e a l E s t a t e F ee = 0.06 × $300 , 000 = $18 , 000
Shipping Fee The shipping fee is a fixed cost of $4,000.
Total Shipping Fee S hi pp in g F ee = $4 , 000
Calculate Family Travel Cost The family travel cost is $400 per person for a family of 3. So, the total family travel cost is:
Total Family Travel Cost F ami l y T r a v e l C os t = 3 × $400 = $1 , 200
Calculate Total Recruiting Expense Finally, we sum all the costs to find the total recruiting expense:
Total Recruiting Expense T o t a l R ecr u i t in g E x p e n se = $8 , 000 + $1 , 000 + $14 , 000 + $18 , 000 + $4 , 000 + $1 , 200 = $46 , 200
Final Answer Therefore, the total recruiting expense is $46 , 200 .
Examples
Recruiting expenses are a crucial part of a company's financial planning. Understanding these costs helps businesses budget effectively and make informed decisions about hiring. For instance, if a company plans to hire 10 employees, knowing the total recruiting expense per employee allows them to forecast the overall financial impact. This also aids in comparing the cost-effectiveness of different recruitment strategies, such as using recruitment agencies versus in-house recruiting teams. By carefully tracking and analyzing these expenses, companies can optimize their hiring processes and improve their bottom line.
