Crunching the Numbers: A Guide to Calculating Your True Hiring Costs in Kenya

Crunching the Numbers: A Guide to Calculating Your True Hiring Costs in Kenya

Crunching the Numbers: A Guide to Calculating Your True Hiring Costs in Kenya

Hiring is an essential part of running a business in Kenya and across Africa. It’s crucial to find the right talent to drive your company’s growth and success. However, hiring can also be a very expensive process. In Kenya, the average cost of hiring an employee is estimated to be around 300,000 Kenyan shillings (KSh) or $2,200. This includes the cost of recruitment, onboarding, training, and lost productivity.

If you’re not careful, the cost of hiring can quickly eat into your profits. That’s why it’s important to calculate your true hiring costs in the Kenyan or African context. This will help you make sure that you’re getting the most value for your investment in human capital.

What are the components of hiring costs in Kenya or Africa?

There are a number of different components that make up the cost of hiring in Kenya or Africa. These include:

  • Recruitment: This includes the cost of advertising, job boards, and agency fees. In Kenya, the average cost of advertising a job is KSh 1,900 to KSh 20,000 ($10 to $149). Job boards typically charge a fee of KSh 1,000 to KSh 10,000 ($10 to $74) per job posting. Agency fees can range from 15% to 25% of the first year’s salary for the hired candidate.
  • Onboarding: This includes the cost of training, orientation, and benefits. In Kenya, the average cost of training a new employee is KSh 50,000 to KSh 100,000 ($374 to $748). Orientation typically takes one to two days and costs around KSh 10,000 to KSh 20,000 ($74 to $149) per employee. Benefits such as health insurance, pension contributions, and paid time off can add another 30% to 40% to the employee’s salary.
  • Lost productivity: This is the cost of lost productivity while the position is vacant. In Kenya, the average cost of lost productivity due to a vacant position is estimated to be KSh 20,000 to KSh 50,000 ($149 to $374) per month.
  • Time-to-hire: This is the time it takes to fill a position. In Kenya, the average time-to-hire is around 60 to 90 days. The longer it takes to fill a position, the more it costs in terms of lost productivity and potential revenue.

How to calculate your true hiring costs in Kenya or Africa

There are a few different ways to calculate your true hiring costs in Kenya or Africa. One way is to use a simple formula:

Cost per hire = (Internal cost + External cost) / Total number of hires

Internal costs are the costs that are associated with hiring employees from within your organization. These include the salaries of HR personnel, the cost of training, and the cost of benefits.

External costs are the costs that are associated with hiring employees from outside of your organization. These include the cost of advertising, job boards, and agency fees.

Total number of hires is the number of employees that you have hired in a given period of time.

Once you have calculated your cost per hire, you can use this number to benchmark your hiring performance against other companies in your industry and region. You can also use this number to track your hiring costs over time.

How to reduce your hiring costs in Kenya or Africa

There are a number of things that you can do to reduce your hiring costs in Kenya or Africa. These include:

  • Use technology to automate the hiring process. There are a number of different applicant tracking systems (ATS) and recruiting software programs that can help you automate the hiring process. This can help you save time and money.
  • Use social media to recruit candidates. Social media is a great way to connect with potential candidates in Kenya and Africa. You can use social media to post job openings, share company news, and engage with potential candidates.
  • Referrals. Encourage your employees to refer their friends and family for open positions. This is a great way to find qualified candidates who are already familiar with your company culture and work ethic.
  • Utilize local recruitment agencies. Local recruitment agencies can be a valuable resource for finding qualified candidates in Kenya and Africa. They have a deep understanding of the local job market and can help you find candidates that are a good fit for your company culture and values.

KaziQuest ATS: A Comprehensive Hiring Solution for Kenyan Businesses

KaziQuest ATS is a Kenyan-based applicant tracking system designed to streamline the hiring process, reduce hiring costs, and improve the overall hiring experience. It offers a suite of features tailored to the needs of Kenyan businesses, including:

  1. User-Friendly Interface: A simplified interface enables easy access to all hiring functionalities, making it convenient for HR personnel and hiring managers to manage the recruitment process effectively.
  2. Advanced Search Capabilities: Powerful search filters allow for quick identification of qualified candidates based on specific skills, experience, and qualifications, reducing the time spent screening applications.
  3. Automated Workflow: Automated tasks, such as candidate screening, interview scheduling, and email notifications, streamline the hiring process, saving time and resources.
  4. Comprehensive Reporting and Analytics: Detailed reports and analytics provide valuable insights into hiring trends, candidate performance, and overall recruitment effectiveness.
  5. Cloud-Based Accessibility: KaziQuest ATS is cloud-based, enabling access from anywhere, allowing for remote hiring and collaboration across different teams and locations.

Conclusion

In Kenya, hiring is an essential process for business growth and success. However, understanding and managing hiring costs is crucial for optimizing recruitment strategies and ensuring financial sustainability. By calculating true hiring costs, employing cost-effective strategies, and leveraging technology like KaziQuest ATS, Kenyan businesses can streamline their hiring process, reduce expenses, and make informed decisions that contribute to long-term success. Click here to start your free trial. 

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