How Much Could a Bad Hire Cost Your Business?
The hiring process takes a lot of effort, and time is money! When you consider all required steps and the cost associated with them, it makes sense to make careful hiring decisions. The livelihood of your business depends on it.
The cost of a bad hire
For many employers, it’s difficult to narrow down exactly how much hiring an ineffective employee costs the business. However, you can take several things into consideration when determing an estimate.
- Advertising costs in the hiring process
- Relocation costs provided to the employee
- Time and salaries of interviewers and hiring managers
- Time and salaries of those who train and onboard new hires
The bottom-line message: employee turnover is not cheap! You may also take into account indirect costs such as loss of productivity, decreased output, lost customers and even the turnover of other employees who were negatively impacted by the bad hire.
How to improve the quality of hiring choices
So what can you do to avoid making costly decisions and improve the quality of candidates you bring on board with your business? Try any of these tried-and-true methods for finding best-fit candidates:
- Know exactly who you’re looking for. This is the number one way to improve the quality of your hires. Review all roles associated with a job and highlight key skills an employee needs to excel at the position. Having a profile of the ideal candidate makes the hiring process much more targeted and ensures bad fits are eliminated earlier in the hiring process.
- Write specific job descriptions. These include very detailed qualifications lists. The more detail you can provide in a job description, the more you’ll automatically narrow down those who apply. This will, in turn, help to improve your candidate matches and also decrease the number of resumes you’ll need to review.
- Hire for cultural fit. Include information about your office environment in your job descriptions so applicants know right away whether or not they’ll enjoy working for you. You can also ask questions during job interviews pertaining to your culture, such as what management style candidates prefer to work under and what their preferred work environment looks like.
- Work with a recruiter. Staffing agencies are experts at working with you to understand your exact hiring needs, then scouring the candidate pool to find the best matches. Recruiters make it faster and easier to find the right hires, while saving you on the cost of employee turnover.
- Implement an employee referral program. Let your current workers help you find new staff! An employee referral program provides your staff the opportunity to recommend candidates based on how well they would match with your job openings. A referral program is helpful because it leaves lead generation in the hands of those closest to the work.