You mean you actually have to pay graduates??
All kidding aside, students and graduates present an affordable source of talent but simply cutting a pay check may be doing the student and yourself (or your business) a disservice.
Let’s explore 5 key budget related factors to consider when hiring a graduate:
Internships (often referred to as Work Integrated Learning on Australian University campuses) are a great opportunity to experience graduates without the commitment of a full-time role.
Many businesses have ample tasks that are perfect for students or graduates and the internship provides an affordable means to an end. Not only are students provided meaningful tasks to complete, but you as an employer are able to see them operating in the workplace – the ultimate “try before you buy”.
From a student perspective, gaining real world experience while studying or just out of university can be a serious competitive advantage. Employers are always looking for the safe option, so the student who has been in the workforce and has some industry experience is always going to stand out. The expression “try before you buy” doesn’t just apply to the employer. Plenty of students have undertaken an internship only to find out the job or industry they thought was for them isn’t quite right.
Small business owners spend around 40% of their working hours on tasks that do not generate income, such as hiring.
In small businesses and start-ups with only small teams, almost every new hire is crucial for the team and businesses success. The vast majority of these businesses do not have dedicated HR professionals meaning that the recruitment process falls to staff who have to juggle their day jobs while performing a task they may not have experience or expertise in. When you consider the many steps involved in the recruitment process, each hire potentially removes hours from a managers or owners working week.
Another time component to budget for is coaching, development and mentoring. In order to optimise what you’re gaining from hiring a graduate, managers must commit time and effort to ensure the new hire is being developed and engaged properly.
Finding the right student or graduate isn’t easy. Placing a job ad does not come for free, and it adds up to the total cost of hiring an employee.
Places like Seek charge up to $500 for 30 days for one position and LinkedIn often charge on a pay-per-click model which can be a couple of dollars per single click. Additionally, some online job platforms gets push you ads further down the page unless you pay for feature inclusions.
4. Onboarding and training
When you hire a graduate, it is unlikely they will be productive on day one and in reality it’s likely to take some time for them to get up to speed (think 6 months). During this time period, it is unrealistic to think you are going to get a return on your investment and the best you can do is to provide support to ensure the development curve is as steep as possible.
An average company loses anywhere between 1% and 2.5% of their total revenue on the time it takes to bring a new hire up to speed.
5. On costs
A salary is not just a salary! There are many associated costs of an employee:
On average, an employee will end up costing you up to 1.4 times more than their salary.
a. Superannuation, which is a minimum of 9.5%.
b. Annual leave. Although this is built into the wage, you are effectively paying a salary for 48 weeks of work in the year
c. Sick leave, typically 10 per annum
d. Public holidays, 13 in Australia each year
e. Compulsory workers compensation varies depending on the industry but can be in excess of 15% of the total annual wage.
f. Payroll tax is payable in each state when you pay over a certain threshold in wage
How to decrease your graduate hiring budget?
Studium allows students and graduates to highlight their skills and attributes in a searchable manner, providing demonstratable evidence of tasks and achievements while also linking to academic information. Employers are able to find students that best align to their business requirements in real time by drilling into a number of search parameters. Real time feedback informs both students and employers to market trends and industry requirements.
Studium reduces the cost of recruitment by removing time constraints and lengthy recruitment processes while enabling managers to find those students and graduates who are best equipped to flourish within their workplace.