[Free template] The true cost of hiring warehouse workers (full-time vs. temp)

Given the current economic uncertainty, building resilience is the top priority for many businesses.

That's especially true for those producing, packaging, and shipping products, who need to delicately balance both 100% on-time deliverability and fiscal responsibility. Given that labor is a significant percentage of overall expenses, we've outlined the factors associated with hiring a full-time employee vs. temp worker.

Plus, we built a template that you could use for your own workforce planning, which you can download at the bottom of this article.

Comparing the cost of hiring full-time employee vs. temp worker

Below we breakdown the total cost of a worker and recruiting costs. Before we dive deeper, it’s worth noting that when hiring efforts are due to employee turnover, many Human Resource experts include indirect costs, like the loss of productivity, which can increase overall costs to an average of $1,500 for hourly employees and take on average of 24 days.

Here are the common factors into a worker’s compensation outside of hourly base pay.

Screen Shot 2020-07-01 at 10.36.35 PM

Based on benchmark data on typical warehouse associate roles, we find that over 20% of a worker’s total cost consists of benefits, taxes, and insurance. A full-time employee’s annualized cost can be comparable to that of a temporary worker.

Estimated Cost
Screen Shot 2020-07-02 at 2.26.24 PM

Want to enter your own numbers? Download the cost model template at the bottom of this article.

Recruiting costs: add an extra $670 per worker

While it’s likely not a surprise that recruiting requires time and money, the actual cost can be more than you expect. Especially in these times, workers are affected by a lack of reliable public transport, childcare, and health conditions, making day-to-day operations potentially more volatile. This means your HR team will spend more time finding, managing, and maintaining workers to ensure they show up consistently

We break down the costs both in time required to recruit and the tools needed to hire a worker.

Screen Shot 2020-07-01 at 10.39.18 PM

*At an average HR Manager rate of $50/hr, **Based on a range between Craigslists post ($40/post) to ZipRecruiter daily post rate ($16/post daily) over average time-to-fill of 24 days.

$0 recruiting cost and 1-day turnaround with temp workers

For temp workers, a staffing agency like Instawork does all of the recruiting for you. Here’s how Instawork delivers:

  • Better quality workers
    As a tech-enabled staffing solution, Instawork attracts and screens warehouse workers more efficiently than traditional agencies. You get access to a broader network of workers.
  • Greater accountability and visibility
    Instawork also uses technology to give your account team the tools to not only match you to the best workers, but ensure they show up on-time, with an average 95% fill rate.
  • Flexibility at scale
    PwC’s Supply Chain practice shared that businesses that grew in the last recession were able to flex 20% of their capacity within .5 days. It’s critical to build agility so you can take on opportunistic business opportunities. With Instawork, you only pay for the work you need. And we’re built to flex with you quickly.

    How does your full-time employee cost compare with the cost of hiring through a staffing agency?

Get your free template

Browse Articles

Sign up for our newsletter!