The True Cost of a Bad Hire
The True Cost of a Bad Hire | A Human Resource Blog
The cost of recruiting, hiring, and onboarding a new employee can be high – yet rewarding for the right candidate. But what about the wrong candidate?
Few hiring managers are aware of all the factors contributing to a bad hire. There’s more than just monetary loss to consider – all it takes is one bad hire to damage the reputation your company spent years to build.
“The cost of a bad hire is always expensive. Most companies don’t know the full cost of the turnover, so they don’t apply the resources upfront to avoid it,” says Arte Nathan, founder of The Arte of Motivation, a human resource advisory service.
Brandon Hall Group, a human research and analyst firm based in Florida, identified several variables that go into calculating the true cost of turnover. Those include:
- Recruitment advertising fees
- Staff time/Loss of productivity
- Training and relocation fees for replacement hires
- Negative impact on team performance
- Disruption to incomplete projects
- Lost customers/Fewer sales
- Outplacement services
- Weakened employer brand
- Litigation fees
All those costs, plus recruiting, hiring, and onboarding another new hire again means that a bad hire is time consuming and weighs heavily on your bottom line. So how can you make sure you hire the right person for the job?
Under pressure to fill a position fast, recruiters and hiring managers have admitted to making poor hiring choices, and lacking the skills to interview and hire people effectively. Those two factors alone can spell disaster – combine them and you’ve got the perfect recipe for a bad hire.
A great way to ensure you’re recruiting the right people for the job (the first time!) is by working with an established staffing and recruiting firm who has experienced recruiters and proven techniques for finding the right candidate for the job.