When it comes to recruitment, all too often the cost of getting it wrong isn’t forecast and appreciated.
Whether a business recruits direct or via an agency, there are essential factors that are needed to protect time and spend (and time is money!) through the process and to avoid the costs of the new employee not working out. Expertise and knowledge are needed to identify, qualify and engage the RIGHT people, and avoid wasting time on the wrong people; the time and delicate management to keep hold of the right people through the process, the experience and skill to negotiate the right package to ensure satisfaction from the off and, here’s the big one, the impartial qualification that ensures a genuine and honest match of motivations and expectations from both the new employee and employer! Please take a read of this article.
If you do make a bad hiring decision, here are a handful of the physical costs that you will have wasted and incurred and may need to spend again the second time around!
Advertising costs using job board/s
Money lost for the business over the time the bad hire is dis-engaged or not as productive as needed or the delay in intended growth impact, or all 3!
Wasted time, and therefore money, in the entire recruitment process and all involved
Potential cost of recruiting a temp or freelancer to cover the period that you do not have anyone in the post
Time and money wasted in induction onboarding and training
Time and money lost while extra support is given (training, time or other employees having to train and so not generating income themselves)
That is not all, there are also other costs including:
Team morale – if someone is not engaged, or if staff turnover is high this can affect the whole team and their productivity and/or morale as a whole
If staff turnover is high this may affect the company reputation and therefore impact on new business opportunities
High staff turnover will put off potential new employees
If the working culture is affected this could unsettle the team and increase the risk of people leaving
According to accountant Accounts and Legal, the average junior employee costs UK SMEs £12k to replace. And a study by the Society for Human Resource Management has predicted that every time a company replaces a salaried employee, it costs an additional 6-9 months’ salary - that’s £20k-£30k for a £40k employee. Another survey early in 2020, conducted by Career Builder, of more than 6,000 hiring managers and HR professionals, showed that more than 50% of employers in each of the 10 largest economies in the world revealed they had felt the effects of a bad recruitment decision. In the UK alone, 62% of employers reported a bad hire and 27% of companies said a bad hiring decision had cost them over £50,000.
Your employees are your biggest asset and cost, so investing in getting recruitment right is critical!
If you were investing in a piece of machinery, it would no doubt be a carefully thought out process, engaging with specialists to ensure that you are getting the very best equipment - you wouldn’t want it to break and incur the cost of replacing it in the first 12 months.
We know how costly a bad hire can be to our clients which is why we are so passionate about helping them get it right; whether that is using us to run and manage the campaign start to finish, consulting, or actually helping to plug the gaps in the process of an in-house recruitment campaign. It’s a flexible range of solutions that we tailor each time, to every unique client. See our range of solutions here.
Let us help you get the recruitment process right the first time.