Updated: Apr 16, 2019
It is critical when hiring for a position that you consider your company’s bottom line. Working with the right talent acquisition partner will keep costs to a minimum. Let’s take a look at reasons why hiring poorly can be so costly.
Bad Hiring Leads To High Employee Attrition
Bad hiring decisions lead to 80% employee turnover, according to Harvard Business Review. That is staggering. Employees must fit into your culture. Then accept your way of doing things, be strong in the skills you need, and make your team more productive.
You must have those things otherwise you have the wrong person for the job. The result of your recruiting efforts will then cost more than you expect. You want to avoid turnover as much as possible. Because high turnover impacts the bottom line significantly.
Attrition Costs Much More Than An Employee’s Salary
Statistics state that turnover results in a loss of more than 1.5 times a poor hire's salary. This means at least 30% of their first year’s earnings go out the window. Imagine if the person is on the Executive team. That salary is going to be higher leading to an even greater loss.
It doesn't matter where the employee falls into the big picture. The costs come from the the need to rehire and retrain an individual. Outside of money also lies the value of time invested in a person by you and your team. In the end, this could impact how well you deliver results to your customer and the associated revenue.
Poor Hiring Means Loss Of Productivity
If your team is working on a deadline in which a new hire is crucial, poor hiring can affect productivity. Your deadline stretches and then becomes unattainable. The team’s morale will suffer too.
After all, productivity is more than meeting a deadline. It is the interaction between employees that creates a sense of moving forward well. Don't hire someone that doesn't click with your team. It will lead to problems and loss of productivity in the end.
Losing Employees Ultimately Leads To Negative Feedback
Your online reputation is sensitive. There is no other outlet more prone to negative feedback. When a disgruntled employee leaves your company you can expect some backlash on social platforms or job sites like Glassdoor and Indeed. Your best bet is to make the separation as mutually beneficial as possible or better, to completely avoid it by hiring right.
A negative online and community reputation can make it difficult to hire again. This is because they will feel a lack of trust in your promises. So, avoid turnover as much as possible by hiring right the first time. Keep in mind, hiring the right person reduces your recruiting costs.
Hiring A Mismatch Results In More Recruiting Costs
Imagine hiring someone and feeling upbeat and happy with your decision. Then find out that the person does not get along with the team. Or, they do not have the depth of expertise you thought they had. Then, the dissatisfaction on one end or the other sets in. This is common when you don’t have the right recruiting process or a targeted acquisition strategy in place.
The more often you have to replace and retrain an employee, the more money you are spending on hiring for the same position. This can add up really quickly, especially if you are using an outside agency. And, it can cause stress and low morale in your recruiting team.
A right match requires going beyond evaluating skills and experience. You must verify skills and background through testing/pilot engagements/extended reference checks. Employ scientific tools to assess culture and values fit. If you have a partner that has these, it should be the first place you want to go when you need a new employee.
Hiring in this digital age is very different from what it used to be. Candidates have more options, are aware of employee experiences (glassdoor), have more power to negotiate compensation, etc. You need to approach hiring as you do in acquiring a new customer.
Start with a strategy, get innovative in attracting qualified candidates, employ latest tools & portals for sourcing, implement efficient processes, and drive these using a dedicated team - To HIRE RIGHT, the FIRST TIME.
snipebridge is an innovator in managed services for hiring exceptional talent. In our unique model, we reconstructed the four key pillars of hiring - People, Process, Tools and Pricing. Our goal is to enable our customers to accelerate the hiring cycle by 35% and provide significant improvement in quality & retention of employees.
Contact Us today to set up a FREE consultation.