Have you ever walked into a recruitment process unclear, unfocused or under resourced? As a result you hired quickly, and not necessarily strategically, thoroughly or accurately? Did you think to yourself at the time ‘if it doesn’t work out, no great loss, I will just hire someone else’? If you answered yes, here are two facts:
- You are not alone
- You couldn’t be more wrong
A failed recruit costs your business in an immeasurable number of ways. Let’s look at some of these costs and how they could impact you:
- Time – no matter how quickly you do your recruitment it inevitably costs you time. There is your time in advertising, screening applicants, interviewing, making decisions and hiring someone. On top of that you have the time it takes to induct them, train them and teach them about the products, customers and suppliers.
- Knowledge – every time you lose someone from your business, they take knowledge with them. In many cases this may not be a negative thing, but what happens if this information and knowledge goes to your competitors in the wrong hands of a disgruntled ex team member
- Reputation – having a high staff turnover costs your business reputation, and your reputation as a manager. This affects your ability to attract top quality talent in the future, and also effects your reputation with your customers, suppliers and business associates.
- Team Morale – failed recruits and consistent turnover undoubtedly affects the rest of your team. Inevitably the team ends up picking up the slack of the ‘gap’ in staffing and this breed resentment and overworked employees.
- Customers – when customers having inconsistency in their service, which is often the result of a change in personnel, it gives them one more reason to look for an alternate supplier, especially in competitive markets.
- Money – all of the above end up costing you money, and impacts your business bottom line. The table below demonstrates how these sometimes ‘hidden’ costs can add up in your business:
Activity Cost for Initial Recruit Cost of subsequent recruits
- Cost of online ad $150
- Cost of print ad $1,500
- Your time (25 hours x $150 per hour) $3,750
- Time spent training (40 hours x $150 per hour) $6,000
- Lost productivity in the role (approx $2,500 per month) $7,500
- Set up of phones, computers, workspace etc $1,000
- Negative impact on motivation and workflow invaluable
Total Cost if the 1st placement had been successful – $12,400 Total Cost – $32,300 Loss due to re-recruiting – $19,900 So what’s the message? Get your recruitment right, wherever possible, the first time and don’t lose in excess of $19,900! What should you do? Gain the knowledge, skills, time and resources to do it right yourself, or get an expert to help you – your business will be better for it!
