A company hires an employee with a family of 5 for a salary of $140,000 over 3 other candidates. If the employee sold her house for $310,000, what is the total recruiting expense?
| Recruitment Costs |
| :---------------- | :----------------- |
| Interview Costs | $2,000 per person |
| Job Posting Fee | $1,000 |
| 1st Year Fee | 10% |
| Real Estate Fee | 6% of sales price |
| Shipping Fee | $4,000 |
| Family Travel Cost | $400 per person |
Answer (2)
Calculate the interview costs: 4 × $2 , 000 = $8 , 000 .
Calculate the 1st year fee: 0.10 × $140 , 000 = $14 , 000 .
Calculate the real estate fee: 0.06 × $310 , 000 = $18 , 600 .
Calculate the family travel cost: 5 × $400 = $2 , 000 . The total recruiting expense is $8 , 000 + $1 , 000 + $14 , 000 + $18 , 600 + $4 , 000 + $2 , 000 = $47 , 600 .
Explanation
Problem Analysis We need to calculate the total recruiting expenses for the company. We will consider all the costs listed in the table and sum them up to find the total expense.
Calculate Interview Costs First, let's calculate the interview costs. The company interviewed 4 candidates (1 hired + 3 others) and the cost per interview is $2,000. So the total interview cost is: 4 × $2 , 000 = $8 , 000
Record Job Posting Fee The job posting fee is given as $1,000.
Calculate 1st Year Fee The 1st year fee is 10% of the employee's salary, which is $140,000. So the 1st year fee is: 0.10 × $140 , 000 = $14 , 000
Calculate Real Estate Fee The real estate fee is 6% of the employee's house sales price, which is $310,000. So the real estate fee is: 0.06 × $310 , 000 = $18 , 600
Record Shipping Fee The shipping fee is given as $4,000.
Calculate Family Travel Cost The family travel cost is $400 per person, and the employee has a family of 5. So the total family travel cost is: 5 × $400 = $2 , 000
Calculate Total Recruiting Expense Now, let's sum up all the costs to find the total recruiting expense: $8 , 000 + $1 , 000 + $14 , 000 + $18 , 600 + $4 , 000 + $2 , 000 = $47 , 600 Therefore, the total recruiting expense is $47,600.
Examples
Recruiting expenses are a critical component of a company's budget. Understanding these costs helps businesses make informed decisions about hiring strategies. For instance, a company might analyze whether investing more in online job postings (Job Posting Fee) or focusing on local candidates (Family Travel Cost) is more cost-effective. By carefully tracking and analyzing these expenses, companies can optimize their recruitment processes and allocate resources more efficiently, ensuring they attract top talent while staying within budget. This also helps in better financial planning and forecasting for the human resources department.
The total recruiting expense for hiring the new employee and relocating her family, considering various costs, is $47,600. This amount includes interview costs, job posting fees, a first-year fee based on salary, a real estate fee from house sales, shipping fees, and family travel costs. Each of these cost components was calculated step by step to arrive at the final total.
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