What does it cost a business to hire someone who is not a good fit for the company? We don’t have to look far for the answer because the Price of a bad hire is always expensive.
Estimated costs of a bad hire in Sydney might run from 15% to 21% of the employee’s salary, depending on their level of seniority. Terrible hiring may put much stress on a manager’s patience and the morale of their coworkers and some additional expenses if the individual is eventually replaced.
Why Hiring the Wrong Person can be very Expensive?
Many small businesses start with no human resources department and often rely on just one or two people to fill all administrative roles. When these entrepreneurs hire someone new, they simply say, “we’ll give them a try” and hope for the best. The problem is that if the person doesn’t perform well, they still have to pay the rest of their salary. So, you can’t easily get rid of them unless they really screw up.
It is evident that bad hires mean wasted money. They may not come with an upfront price tag attached, but it is still costly.
To avoid wasting money, employers need to spend the necessary time and energy to prevent a bad hire. Rehiring can cost a company much money, and to add to that cost, it’s also difficult to rehire.
Aside from the difficulty of rehiring, high turnover also impacts your ability to get things done. Training and losing employees is expensive, so it makes sense to avoid high turnover rates. It’s a bad idea to hire an employee who has no potential to learn or grow. You want employees who are willing to take on new challenges, not ones who are happy to stay in their current roles.
We all know that time is money. And a bad hire can cost employers a tremendous amount of time lost. Recent studies show that recruiting, hiring and training a new employee can cost up to $50,000. A bad hire can burn a lot of time in training, acclimation and the like. If you have to replace a bad hire, it is even worse.
Imagine having to repeat the same process of hiring over and over because you missed hiring the most suited applicant for the job. Let’s face it; sometimes, we might miss out on the best possible applicant when they apply for the job. And, we can’t afford to miss out on them. If you missed out on them, you could be left without any other suitable candidates. What can be worse than that? You could lose your customers, your business could go bankrupt, or your team could revolt.
Wasted productivity can lead to lost customers and incomplete projects. This is one outcome of a bad hire. Bad hires don’t usually perform what they are expected to do. As a result, instead of paying attention to getting sales or making customers happy and satisfied, they tend to lose them.
Continuing an incomplete project due to bad hires is as bad as starting a project from scratch. The replacement employee will have to redo parts of the project the bad hire had already finished or, worse, dump the unfinished one and start over.
How Can Recruitment Agencies Help?
Recruitment agencies are experienced firms in the field of recruitment. They have a team of experts who knows the working pattern and current trends of job markets. These agencies help get qualified, talented, suitable and potential candidates as per the company’s requirements. They also do thorough reference checks and pre-employment testing to ensure their candidates have a proven good history of employment.
Recruitment agencies work with employers to find the right people for the right roles. For small and big companies, recruitment agencies are a go-to for locating the perfect candidate and avoiding bad hires.