What is the true cost of hiring a bad employee?

Hiring people is an inevitable part of doing business. As your business grows and the demand for your goods and services increases, you will need more staff to help meet that increased demand. These people are there to help your business make money, but hiring the wrong person for the job can be a very expensive blunder! You need to get it right first time or it is going to cost you.

A recent Oxford Economics report stated that replacing a single member of staff incurs and average cost of £30,614. The major cost implications of replacing a staff member is the loss of output a company experiences during the period a new worker is getting up to speed. It takes an average of 28 weeks for a new employee to reach optimum productivity which has an attached cost of £25,181 per employee!

We often forget the large cumulative cost of taking on a new starter because the cost is incremental, it sneaks up on us over time. The costs adds up when you take into account the time and effort of writing and placing job adverts, screening candidates, making phone calls, organising interviews, sending emails, conducting interviews, checking references and so on. By the time you have done all of that, it is often easier, cheaper and quicker to have used a recruitment partner.

However, not all costs of a new hire are monetary. One bad employee can be disastrous for a company, they can cause client dissatisfaction and administration errors. There are plenty of examples where one bad hire has led to headlines. An unmotivated, incompetent or dysfunctional employee can bring an entire team down, impacting productivity and team morale.

So, as I’ve mentioned, hiring the wrong employee is costly. But hiring a bad manager is even worse. Depending on their level of responsibility, the effects of a bad hire can spread far beyond one team, especially if the poor employee has authority when it comes to who to hire. Poor performers tend to hire poor performers, this occurs because people tend to employ people with a likeness to themselves. Weak managers tend to hire employees who seem easy to manage and pose no threat. Resultantly, productivity declines and costs soar.

‘You are only as good as the people who work for you’. Hiring the wrong person for the job can be one of the most expensive blunders a business can make. We know, we get called in to fix the problems. Prevention is better than cure.

This is where Stage comes in. We work hard to understand not only the requirements of the role, but your company’s culture to ensure we find the perfect candidate for you. We will have one call with you to find out all the details and ask all the questions we need to, then you can leave us to it. This allows your business to continue to focus on its core tasks while we seek out the highest calibre candidates. We then pre-screen them, narrow them down to the final 5 and then we send those 5 CVs to you so you can choose who to interview. Then back to us to contact the candidates and organise the interviews. We work hard to ensure we don’t waste your time and ensure the process is as simple as possible for you.

If that sounds good to you, give us a call on 0207 696 1437.

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