What’s the cost of making the wrong hire?

A poll by REC highlighted that 85% of HR decision-makers admitted that their business had made a bad hire at some point. Within this group, 1 in 3 thought this hire cost their business nothing. However, the costs can add up, especially when hiring up to the manager level.

In their example, REC tested what it’d cost a company to take on a mid-manager with a salary of £42,000 per annum.

Here’s a breakdown of the different areas this poor hire could affect and the money lost because of it:

• £28,000 in salary
• £1,500 in training costs
• £9,730 in recruitment costs
• £9,625 in lost productivity of the new employee
• £29,160 in lost productivity of the team
• £54,000 in staff turnover

That’s a total of £132,015! Obviously, these figures can vary but it’s still a pretty shocking amount considering it’s more than triple the salary.

We’re well aware that this can happen whether hiring through an agency, your own talent acquisition team, or a direct line management hire, but by having a strategic and thought-out recruitment process, where you’re clear on what you hiring for, this can go partially towards preventing a poor hire in your team. Harvey John is a specialist recruitment agency in the Accountancy, Tax, and Legal sectors and is more than happy to help advise on how you can alleviate a situation like this.

Our governing body REC submits regular infographics covering stats about the recruitment industry, hiring trends, news in the sectors, and more. These infographics are a useful way to understand what’s happening in the world of recruitment so we’ve broken it down to help share how these trends could affect your business.

Harvey John has been a member of REC since 2004.