Good hires can be a powerful catalyst for positive change in your business. So, it stands to reason that a bad hire can also have a negative impact on your business. Do you know how much bad hires could cost you?
According to research conducted by the Recruitment and Employment Confederation, a bad hire for a position with a salary of £42,000 can lead to a cost of £132,015 for the company! So, what makes up this cost?
Cost of lost productivity. How much does the new employee slow down your well-oiled machine? Research from Oxford Economics suggests a new employee can take on average 28 weeks to get up to speed and produce the same level of work as the person they have replaced.
Advertising/recruitment fees, whichever route you take there is a cost, advertising yourself may seem cheaper but there will be far more man hours involved; wading through perhaps hundreds of applications and dealing with the unsuitable ones.
Hiring freelancers. During the time waiting to replace a bad hire, you may need to utilise freelancers for an extended period of time.
Interviewing costs. How much is your hourly billable rate, how many interviews take place to hire one person?
HR/Training costs such as onboarding, setting up a new employee with tech and systems.
Management costs spending additional time and energy trying to bring underperforming new employees up to scratch.
Whilst many people focus on the cost of a wrong hire in financial terms, just as important is the effect on morale and culture. Why? We all know that a bad apple spoils the bunch, so to speak. When a wrong hire does a bad job, good employees get burnt out making up for them and the longer that goes on, the more you risk their frustration increasing and potentially losing good employees. It’s also reported in a study by Warwick University that happy employees are up to 12% more productive. The effect on company culture can be contagious. Poor performers can lower the bar for other employees and bad habits can spread like a virus.
Pre-hire assessment specialists Thrive have created a calculator to quickly and simply show how much failed hires would cost your business, why not give it a try here
Tips for better hires
- Go with your gut Often when a hire doesn’t work out, you realise you had concerns or questions all along. The solution is to put more trust in your instincts and don’t ignore any red flags.
- References Take every opportunity to check candidate references, talk to people they worked for and worked with. So many businesses either don’t take references or just get a basic reference confirming he worked at Company X from Date Y to Date Z.
- Date and date again before marriage Don’t rush into a job offer after one meeting, take your time to meet candidates on multiple occasions and different scenarios. We’ve known employers taking potential senior hires out for dinner for example. Another option is take the candidate on for a trial period if possible, this can be great for both parties to assess the fit before committing.
- Set clear expectations Be clear through the interview process about your expectations for the role and we would always advise to quickly set objectives and KPI’s for their probation period, once someone has joined. Then if expectations aren’t met, there shouldn’t be any surprise on either side if you take action decisively and move on. After all, every business and every leader will make a bad hire in their lifetime, there is no magic formula to make every new employee a great one. But if you hire carefully, it’s also important not to dwell on the mistakes you make when hiring and let things continue longer than necessary, be decisive and cut your losses.
There are a number of ways working with a specialist recruiter such as Creative Resource can help you to avoid making the wrong hire and also mitigate the costs…
Our Directors have over 50 years’ combined experience of recruiting for the creative and marketing sector, and our senior team average over 19 years per person, so we know how to reduce your time to hire and can effectively advise you on everything from market conditions, job specs, salaries through to interview training. We pride ourselves on reducing the amount of time you have to spend both reviewing and interviewing candidates.
We thoroughly interview all the candidates we represent, understanding their motivations and ambitions means we can match them with the right environments for them to flourish. We’ll take a really detailed brief from you, and we’ll want to know about the ‘fit’ of your organisation so we can shortlist candidates whose aspirations and character match your own.
We offer a 3 months free replacement should any candidate you hire through us leave within the first 3 months, and we’re also willing to offer flexible payment terms, firmly believing in a partnership approach.
Throughout the interview process we will take feedback from you and the candidates and we’ll advise you of issues as they arise. That could be that the candidate you favour has other interviews and you need to speed up to secure them, right through to passing on red flags that you haven’t spotted.
Creative Resource has been in business for 34 unbroken years, we have clients that use us exclusively and have done for years, this is down to the very honest advice and help we give and the successful introductions we make. Our ethos is the very antithesis of bums on seats.
If you would like to have an informal chat to see if we can help you just get in touch with our directors Julie or Phil on 0161 477 3221.