Cost of a Bad Hire

3/15/2016 by julie

 

Can your organization survive making bad hires?  The Harvard Business Review points out that as much as 80% of employee turnover is due to bad hiring decisions.  According to a study by the Society for Human Resources Management (SHRM), it could cost up to five times a bad hire’s annual salary.   Other experts will say the cost of replacing an employee, even if you let that person go within 6 months, will cost you two and one-half times the person’s salary. 

Surveys on the 'cost of a bad hire' state the top factor leading to a failed hire, aside from performance issues, is a poor skills match. The second most common reason was unclear performance objectives.

So how do you avoid falling in this trap???  Hire an executive firm, like B&B, that invests time to learn your business model, culture, and partners with you to develop the right job description (with short and long-term initiatives) and a candidate profile.  

Further, the Brandon Hall Group suggests the following steps an organization can take to minimize bad hires:  

• Organizations that lack a standard interview process are five times as likely to make a bad hire
• Organizations that invest in a strong candidate experience improve their quality of hires by 70%
• Organizations that invest in employer branding are three times more likely to make a quality hire

How can we help you avoid a bad hire?  Contact us to learn more about our approach to recruiting.