Cost of a Bad Hire
“I need someone now, anyone will do!”
The pain of a vacancy in a workplace can often drive one to say the inevitable.... “Just send anyone!” Hiring a weak employee will cost you more in the long run than hiring someone right first time round.
At New Staff Solutions, we understand the decision to hire a new employee is crucial, and often time consuming. That’s why we guarantee that we don’t just send you anyone, we send the right one.
If you’re thinking about hiring “anyone” here’s a list of long term costs of a bad hire:
- Lost productivity: A new employee often produces between 25% and 600% less than a top performer.
- Reduced revenue: Poor quality work = less money. The more significant the role, the more revenue lost.
- Lost innovation: Innovation provides your business with a competitive advantage.
- Customers: Weak employees may not know how to handle customers; measurably reducing sales and increasing customer turn over.
- Error rates: Poor performers make mistakes and take time fixing them (while the business foots the bill).
- Gives your competition a confidence boost: Competitive advantage. Hiring weak employees signals to your competitors that you are weakening.
- Management time: Weak employees are “high maintenance” and require more coaching and performance management as well as wasting their managers time. Lost time = lost productivity.
- Must be replaced: Bums on seats help to mask the short term problems, once the employee’s performance mask wears thin, they’ll need to be replaced. Unfortunately weak performers never get head-hunted, so you may be stuck with them forever!
- Law of attraction: Weak managers attract weak employees, weak employees will change workplace culture and eventually your good employees will find somewhere else where they fit in.
- Increased staff turnover: Keeping weak employees sends a message to top employees that their high performance is no longer important or valued.
- Employee resentment: Top performers will resent being in the same team with the “losers” and will have to spend time fixing their mistakes and helping them. Ultimately reducing productivity. Lost productivity = lost opportunities.
The list could potentially be endless and the long term cost of a bad hire could decimate any business. In order to combat the bad-hire syndrome businesses must plan ahead, develop candidate pools and build candidate relationships. Look out for top performers even if you are not recruiting.
Hiring staff doesn’t have to be a stressful experience. Hiring the wrong staff however, definitely will be.