The True Cost of a Bad Hire

The True Cost of a Bad Hire

An organization can spend months determining whether they need to make a new hire. Then, the job description, requirements, and duties are hashed out – sometimes by one person, more often by a team of employees.

By the time you finally make it to the hiring process, your organization could have spent several months preparing. Once you’re ready to start looking for candidates, ads are listed, interviews conducted, references checked…the overall process could take six months or more!

Hiring a single new employee can be a significant cost and burden to your organization. And after a training and orientation period, you’ll expect your investment to payoff.

Hiring mistakes can cost you!

From time to time, you make it through these steps of the process, only to decide that you’ve made a bad hire. At first glance, it can seem like an innocuous decision: simply hire another candidate. In reality, a bad hire can make a significant, negative impact on your business.

Here are some of the ways a bad hire can affect your organization:

  • Actual Cost of Hiring and Training. The steps outlined above take time and actual cost. For just one hire, the cost can add up to thousands of dollars. And the training period (from just a few days to even a few weeks), adds additional cost. Dollars and cents alone make a big impact.
  • Unemployment Tax Rate Hike. Rules vary depending on your state; however, when states pay out unemployment to your former employees, your unemployment tax typically goes up. The rate can go up for the next three years, adding a somewhat hidden cost that can actually be quite significant.
  • Loss in Productivity. When you make a bad hire, you are likely losing productivity out of that position. Adding to the negative impact is the potential loss in productivity among your other employees, who are likely feeing the effects of the bad hire through additional workload or stress.
  • Employee Morale. A bad hire can impact employee morale in several ways. Over the course of a few months (even to years), employees are likely to bond and even become friends. The firing of a co-worker can have a major impact on morale. Stress from covering productivity losses from a bad hire can make overworked employees feel negatively toward the actual bad hire, but also the company, for keeping the bad hire on board.

Don’t let bad hires hurt your organization.
Contact the hiring experts at Peoplelink Staffing. Our hiring methodology and expertise helps us to provide only the most qualified, best-fit candidates for your business.

 

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