The Costs Associated with a Bad Hire
There have been numerous articles written on the subject of "the true cost of a bad hire." Although the financial impact of a bad hire is sometimes difficult to quantify, it's easy enough for staffing and human resources professionals to understand the labor costs associated with the hiring, interviewing, and training process. In short, bad hires are a risk for businesses. Given that top employees produce, on average, three-times as much as poor performers, it's also easy to conclude that the opportunity cost associated with hiring the wrong employee could be astronomical. Maybe, just maybe, after realizing all that's involved, the cost of a bad hire is greater than you think.
Ask yourself this question: How much would your business grow in the next twelve months if you had a staff of top performers? Keep that question in mind as we look at some of the costs related to the hiring process alone.
- Advertising Costs Related to Hiring – When looking to hire a new employee, somebody in the company has to create the "help wanted" ads. Each ad takes time. A labor cost is associated. Ads have to be posted to job boards. This also takes time. What is the cost to the company in this respect?
- Costs Associated with Sorting Through Submitted Resumes – When you advertise for a position in the present economy, the floodgates are opened. If you're not using a staffing agency to read through the submissions and filter out the ones that don't meet criteria and expectations, who is receiving and reviewing those innumerable submissions? What is their rate of pay? How many hours or days does it take for them to narrow the pile down to the top three or five or ten candidates?
- Costs Associated with Scheduling and Performing Interviews – Who is scheduling and interviewing potential candidates? Again, what is their rate of pay and how many hours will it take them to perform the job?
- Cost of Running References and Background Checks – Who conducts reference checks on candidates prior to hiring? Does the company pay a third-party service to conduct background checks (criminal, driver's license, credit, drug screenings)? What does that cost the company?
- Cost of Orientation and Training – Who conducts the employee and benefits orientation sessions? Who is training the new employee on the job? Do the employees involved in the orientation and training process have other job responsibilities? Could you put a price on that loss of production?
- Cost of Restarting – Let's face facts: If the new hire turns out to be a bad hire, the company has to restart the entire process all over again. Then you're lumping cost on top of cost.
It's unfortunate to think that some companies are currently staffed with a number of bad hires that have cost them untold sums in lost resources, revenues, and productivity. Professional staffing agencies, such as Staffing Kansas City, can help reduce costs associated with the hiring process and help companies hire top performers in the first place.
This article is brought to you by Staffing Kansas City, a full-service Kansas City employment agency that offers temporary and permanent employment placement. Looking for a "Perfect Fit" employee? Contact Staffing Kansas City today!