Are you crippling your business with workers that don’t fit with your company?
According to the Society of Human Resource Management, it costs an average of $4,129 to recruit, interview, hire and train someone in America.
When it all works the way it should, the cost is well worth it. The new worker will make a contribution much larger than this initial investment, and over time it’s a win-win.
But what if the worker is a poor fit?
The answer is even worse. Over the course of the staff member’s time with the company, he or she will likely drive costs into the tens of thousands of dollars, according to research published by Fast Company.
But when it doesn’t work the way it should–when he or she quits, gets fired, or simply stops showing up–that money is lost. Worse, you have to repeat the process all over again, and the return on your investment is nothing.
The Far-Reaching Costs of a Bad Hire
While money is the easiest thing to quantify, there are other reasons that make a bad hire one of the most difficult things for a business to overcome.
The first is productivity.
No new person is expected to produce the way more veteran workers are. Depending on the industry and its dynamics, a new hire may have no individual responsibility at all.
While that is an expected expense, what we usually don’t factor in is the productivity lost by the people training the new person. Many times, a new worker will “shadow” someone else, which requires explanation of processes and procedures and answering questions–things that dramatically affect the seasoned worker’s flow.
In fact, nearly 30% of companies report that it takes over a year to bring a new hire up to full productivity.
The second cost of a poor worker is company morale and perception.
When a business is unable to retain a worker, it has an effect on the rest of the staff. If it’s only a one-time occurrence, the perception may be that the hire just wasn’t a good fit. However, if it is a pattern over a period of time, it reflects on the management.
Other workers will start wondering whether or not they’re next. It’s no longer true that if you keep the members of your workforce wondering, they’ll work harder for you. These days, people can and will just walk away.
With 80% of turnover due to poor hiring decisions, this is something you can’t afford to ignore.
Finally, a poor hire can affect the attitude with the rest of the staff.
Unmet expectations cause many of the problems in human relationships, including business relationships. When a new person is hired and begins training, there is a feeling of anticipation among the other workers–especially if there is a hole in the organization that desperately needs to be filled.
People will put their best foot forward and be exceptionally gracious and helpful toward the new person. Plans begin to form in the minds of veteran staff members about how they can shift their workload and get more done–or simply not have to work as hard.
When the new hire ends up washing out or being let go, there is a noticeable let-down among the ranks. Part of that disappointment comes from the knowledge that they will have to do it all over again.
How to Avoid Bad Hires Once and for All
People will be people. We all have our reasons for the things we do and don’t do, and sometimes things just don’t work out. There could be a thousand reasons for this that have nothing to do with the job itself. But here are some ideas that can make it more likely that a new hire will stick around.
The first method is the most difficult. You need to spend extra time on the hiring process, and devote resources to a quality training program once the hiring has taken place.
Some organizations say they “don’t have time” for training, or think it’s a waste of resources. Management feels that people are either going to get it or they won’t.
Within these organizations, there are usually a handful of people running the place, and a revolving door of workers below them. They’re far from ideal workplaces.
On the other hand, businesses that value training of their new hires see a massive improvement in turnover rates. Recruitment, selection, interviewing and training are all done carefully and correctly, with input and feedback from the executives and upper management as well as the workers themselves.
The human resources and training staff are given the attention, the guidance and the budget to build a loyal, cohesive, knowledgeable and productive workforce. In these types of companies, the hiring and training of each new worker often exceeds the average cost of $4,129, but turnover can be virtually nonexistent.
With proper training and a recruitment process that seeks the most valuable skills in potential workers, you can ensure a more successful hiring rate.
But the single biggest reason for a bad hire isn’t always the process. Instead, it’s the time constraints on filling the position. A full 43% of bad hires are due to an urgent need to fill the job quickly.
The single biggest reason for bad hires is a need to fill a position quickly. The time pressure is understandable, but with such a huge loss in capital and productivity, is it really worth it?
And in the face of statistics like this, how can you manage to keep great workers around at all times?
The surprising answer is with on-demand staff members. When there’s a surge in staffing needs, you can look to this category of workers to meet your needs without large overhead.
Unlike traditional employees, on-demand workers already have the training needed to perform the task at peak efficiency.
When there’s an urgent need for an expanded workforce, on-demand workers can play a huge role in keeping the costs of hiring at their lowest rates.
Instead of hiring a full-time employee to fill an urgent role, on-demand staffing can play a part in helping you manage a surge in need without invoking the catastrophic results of a poor hire.