What’s the cost of making the wrong hire?

Many employers will make a poor hiring decision at least once in their career. If you find yourself in this position, then the most important thing is to act on this quickly to save yourself and your team a potentially long-term negative impact. Think about the following stats and reflect on what you can do to avoid the costs 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.

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