No business is immune to the damage of a bad hire. Good hiring practices and careful planning can help to reduce the impact, but there is no way to fully account for the human element of a hiring process. According to a study by the Chartered Institute of Personnel and Development, the average cost to recruit a senior staff member is £10,000 and if that hire doesn’t work out, the cost to rehire can be substantial.
Beyond the standard costs associated with recruiting a replacement, there are additional losses to account for when calculating the financial impact of a bad hire. These are important to keep in mind when handling the consequences and can include the following:
Whether you recruit in-house or use an agency, there is always a cost to recruitment. While it may seem cheaper at first to handle matters internally, that isn’t always the case. Consider the cost of advertising your role and the wasted work hours spent on screening, referencing and interviewing candidates. A bad hire could mean a lot of lost time for your business and, after all, time is money.
If your bad hire is fulfilling an essential role, you may be left with no choice but to endure them until a replacement can be found. During this time, they will be receiving their salary and any benefits their position entitles them to which, depending on their seniority, could be considerable. Should the replacement process prove challenging, these maintenance costs can rapidly accumulate.
Regardless of the experience-level of your new hire, it is likely they will need additional training to settle into their role. Whether it is simply informing them of the practices unique to your business or getting them up to speed on an unfamiliar software package, training can be costly. External training services can be expensive from the outset and, even internally, can be a waste of time if you end up replacing the candidate after just a short period of time.
In the face of more easily apparent costs, employers can overlook the impact of a bad hire on the rest of their staff – but the effects should not be ignored. Team members working for, with or over them can sometimes be required to pick up the slack if they don’t perform as they should. Although this may be expected for a short time with any new employee, with more senior roles it can lead to other members of staff losing morale as their stress levels soar.
The effectiveness of your business is directly linked to your employees, and as a result, an underperforming hire can severely affect your success levels. There is no end to the poor decisions that could be made and the number of opportunities could be lost with an underperforming employee in a crucial position. Not only could they be make calls that are detrimental to your organisation financially, but they have the potential to tarnish your hard won reputation.
If you’re looking to expand your team across 2018, don’t take the risk of making a bad hire. Trust in our 97.5% right-first-time recruitment statistics and speak to us about how our brand advocacy recruitment methods can give your business the best chance of securing the right candidate. Call 0844 997 9700 to speak to one of our specialist consultants or email us directly at firstname.lastname@example.org for further information.