Can the cost of a bad hire be quantified? It’s a fairly simple matter, in terms of pounds and pence, as evidenced by The Recruitment and Employment Confederation (REC), who calculate that a bad hire at middle management level, with a salary of £42,000, can ultimately cost a business over £132,000.
Astonishingly this figure does not include the hidden costs of making an inappropriate decision. Add-ons include such things as the cost of the initial recruitment and training, the decrease in productivity that can occur which may itself lead to increased staff turnover and finally the amount of money it costs to replace the employee.
It soon mounts up and with up to 85% of senior HR staff admitting to making a bad hire for their organisation, it’s not one that many businesses can afford to repeat, especially specialist companies and smaller start ups.
Further research from the REC demonstrates that good recruitment boosts UK productivity by £7.7 billion each year. This is led directly by specialist recruitment companies whose expertise and wide range of contacts enable them to place the right person in the right role.
Let’s take a look at each of the hidden cost issues raised by the REC in detail.
The most obvious solution is not to make the bad hire in the first place. However, it’s not always as simple as it sounds. Let’s take a look at the steps you can take to avoid finding yourself and your company in such a situation.
Firstly and most importantly, companies should seek a recruitment consultancy that strives to eliminate risk from the recruitment process – both for the candidate and the company hiring them. It sounds straightforward but not all recruitment suppliers are willing or able to achieve this.
Decreasing risk includes such strategies as:
Ultimately in recruitment, as in life, there are no ‘no-risk’ situations. However, careful planning and working with an agency who seeks to minimise your risk and assist in your future growth is a sensible strategy that will pay off. If you’re looking to make the right hire for your business, whilst minimising risk and maximising effectiveness, get in touch with JIE Search.