There are many variables in determining what a bad hire may cost your company. But no matter which expert analyses you consider, you can’t afford to make such a mistake very often.
- The U.S. Department of Labor estimates the cost of a failed hire is at least 30 percent of an employee’s first-year earnings.
- Half of HR managers surveyed recently by Forbes said bad hiring decisions had cost their companies “thousands of dollars” – and that’s a conservative figure.
- The Society for Human Resource Management (SHRM) notes the cost of selecting the wrong candidate can run into the hundreds of thousands, or even millions, of dollars – or up to five times a person’s annual salary. The higher a position and the longer a person remains in it, the more it will cost to replace them.
The True Cost of a Bad Hire
Financial estimates of a bad hire may be all over the board, but all of them are painful to your company’s bottom line. And the damage doesn’t end there. The true cost goes far beyond the quantifiable, monetary losses involved.
- A disengaged employee is like a bad virus. Unless you take preventative measures, they become highly contagious. Good employees get burned out as they try to make up for poor performers – and other weak employees simply follow in the footsteps of the culprits. Productivity, morale and possibly even your company reputation can take a nosedive. Also at potential risk are customer satisfaction levels, sales and product quality.
Some Basics for Good Hiring
Prevention is the best medicine. Avoid making a hiring mistake by using these tips:
- Know what you want. Don’t simply recycle past job descriptions. Chances are, the role has changed. Take a fresh look at your needs and the skills you want to add to your team. A refreshed, detailed description will reduce the number of resumes you receive from unqualified applicants.
- Hire for soft skills. Look for the intangibles. A candidate’s skill set is not limited to technical and functional abilities. Equally important are soft skills such as communications, leadership and teamwork.
- Don’t cut corners. Hiring the right person takes time. The key is to develop a comprehensive plan and stick to it. Taking short cuts may ease your immediate hiring stress, but create greater angst in the long run.
PrideStaff Modesto is a smart choice as you develop a winning hiring strategy and avoid costly mistakes. Read our related posts or contact us today to learn more about how we can customize a plan for your organization.