Having employees is more expensive today because the workforce has fundamentally changed. Employees are no longer staying in roles for years simply because of the loyalty that came with a pension. The modern workforce is looking for more than wages. They want flexibility, autonomy, creativity, and to work for businesses that align with their values and vision for the future.

This shift is not wrong. But it does require a different approach when you are building a team. Many business owners learn this the hard way. Stacking roles without addressing leadership, culture, and clarity creates churn. And churn is expensive.

Or, you think you are a great leader, only to find out you are the reason your employees are leaving. And that is an expensive lesson to learn too.

Why Hiring Costs More Now

The true cost of hiring has expanded far beyond hourly pay. Today’s employees come with real, non-negotiable costs that must be planned for in advance.

Those costs include:

• Mandated sick time and holidays
• Retirement plans and benefits
• Workers’ compensation
• Health and liability insurance
• Payroll taxes and compliance

As an owner, it can feel overwhelming to see these hard costs laid out and then realize that leadership, mentorship, and growth opportunities are also expected on top of them. This is where you will start to feel squeezed. Because of the hard costs, with mental costs, plus training costs all add up.

But the pressure is not coming from employees wanting too much. It is coming from businesses trying to solve modern workforce needs with outdated hiring strategies. The role of the business owner is changing. To hire and retain employees at any level, from entry-level roles to executives, leadership must evolve alongside payroll.

Employees Are Not Looking for Jobs. They Are Looking for Direction

Employees are not just looking to be paid. They are looking for a community and a team, with direction, growth, and a sense that their work is contributing to something meaningful.

Employees want:

• Flexibility in how and when they work
• Autonomy to make decisions and contribute ideas
• A clear vision they can believe in and help execute
• Room for creativity and ownership
• Mentorship and feedback

When these elements are missing, even competitive pay cannot prevent turnover. People are not walking away from work. They are walking toward environments where they feel supported, trusted, and developed.

Why Mentorship Is the Real Retention Strategy

Mentorship is what turns a role into a path. Without it, employees are left guessing how they grow, what success looks like, and whether the business sees a future for them.

Strong mentorship provides:

• Clarity around expectations and development
• Confidence to make decisions without fear
• Accountability paired with support
• A shared understanding of the company’s direction
• Stability during seasons of growth or change

One mentor who invests in people often does more for retention than multiple wage increases ever could.

The Hidden Cost of Skipping Leadership Development

Many business owners avoid investing in mentorship and leadership because it feels intangible or expensive. Or you just feel too tired and think they should be able to do their jobs without you. But avoiding it will cause turnover.

Without leadership development, businesses experience:

• Constant rehiring and retraining
• Rising payroll with no increase in output
• Disengaged employees who stay physically but check out mentally
• A business that depends entirely on the owner to function

When leadership is missing, every decision funnels back to you. That is exhausting, it is also not scalable, and your team avoids accountability.

Budgeting for Mentorship Changes Your Mindset

This is where the mindset shift happens.

In my financial workshops, we use a Cost of Labor Worksheet that shows business owners the true cost of hiring an employee beyond their hourly wage or salary. This worksheet is often eye-opening because it includes everything most owners forget to plan for.

The Cost of Labor Worksheet accounts for:

• Base pay or hourly wages
• Payroll taxes and employer contributions
• Benefits, insurance, and compliance costs
• Training and onboarding time
• Leadership and mentorship required to support the role

When you include leadership and mentoring as part of the cost of the position, hiring decisions become clearer. You stop asking, “Can I afford another person?” and start asking, “Can I support this role well?”

This clarity prevents under-resourced hires, reduces burnout for both you and your team, and creates roles people actually want to stay in. Hiring becomes intentional instead of reactive.

The Businesses That Will Thrive in 2025

The businesses that will thrive are not the ones hiring the fastest. They are the ones building environments people want to grow in.

They are prioritizing:

• Mentorship before headcount
• Vision before volume
• Structure before speed

They understand that people stay where they are developed, supported, and aligned.

Final Thoughts from Your Favorite Accountant 🧡

Hiring feels expensive right now because employees are asking for more than a paycheck. They are asking for mentorship, leadership, clarity, and alignment.

If you want help using the Cost of Labor Worksheet to plan your team intentionally and build roles that actually last, come join my January workshop!

Next steps if you are ready:

• ✅ Hire My CFO for done-for-you bookkeeping
• 👩‍💻 Join my Financial Leadership Events to learn how to budget for hiring, leadership, and growth
• 📚 Use my STOP Method book and workbook to align payroll, mentorship, and profit

👉 Because at the end of the day, cash flow isn’t luck, it’s strategy.