Believe it or not, you can genuinely save over $165,000 on your next hiring campaign. It may sound astonishing, but rest assured, it’s entirely achievable. In this article, we’ll dive into the numbers that substantiate the effectiveness of this approach. So, before you dismiss it as hyperbole, let’s explore how you can make it happen.
The fact is, you can pocket $165,000 by steering clear of a bad hire. Let’s break down the figures to grasp the impact of a poor hiring decision on your organization.
Imagine you hire a Team Manager with an annual salary of $42,000 who, despite their experience and qualifications, consistently proves to be tardy, unreliable, and struggles to get along with team members. After eight months of bearing the brunt of their detrimental influence, you’re left with no choice but to part ways.
Here’s the cost breakdown:
- Salary (8 months): $28,000
- Recruiter Fee: $6,300
- Training: $1,750
The total cost of this bad hire: $36,050
But that’s not the end of the story. Under the subpar leadership of this Team Manager, the productivity of the five team members they oversaw dipped by 20%, translating to a squandered $5,600 per employee.
Total wasted productivity: $28,000
To make matters more grim, finding a replacement triggers further expenses:
- Recruiter Fee: $6,300
- Training: $1,750
- Additional lost productivity (it takes five months to find a top-tier replacement): $17,500
The total cost of securing a replacement: $25,550
But the expenditures don’t stop there. Another team member, adversely affected by the stress induced by the bad hire, opts for early retirement, necessitating yet another recruitment effort:
- Recruiter Fee: $6,300
- Training: $1,750
- More lost productivity (it takes five months to replace a valued employee): $17,500
Total cost of replacing the second team member: $25,550
As if this weren’t enough, being understaffed causes you to lose out on a lucrative contract with a new client:
Total cost of missed contract: $50,000
Grand Total of direct and indirect costs: $165,150
This illustration underscores the hefty price tag of a hiring blunder. While not every bad hire may exact this level of cost, the potential ramifications remain substantial. Training expenses could soar, recruiter fees might escalate, and additional bad hires can compound the financial toll.
The good news is that you can avert bad hires. By investing in a high-quality recruitment campaign with a strong focus on retention, you can unlock significant savings. Even a modest improvement in your retention rate can yield substantial benefits.
Here’s what you should do: Inquire with your current recruiter about their retention rate for placements beyond 12 months. If it falls below 96% (our average) or if they lack this vital information, it’s time to contemplate a change. Get in touch with us for a complimentary evaluation of your hiring strategy and assistance in enhancing your retention rates. Book a free, no-obligation consultation at +1 332 600 8926.
Never underestimate the ripple effect of a bad hire within your organization. Take proactive measures to stave off considerable costs and ensure a more triumphant hiring campaign.