According to the U.S. Department of Labor, the cost of a single bad hire can reach up to 30% of an employee’s earnings for just one year. A bad hire doesn’t just impact the salary you pay; the cost spiders out into your recruiting, benefits, lost revenue, and low employee morale. No one goes into the hiring process thinking they’re going to make a wrong decision, but wisdom is knowing when to change to improve the system. Especially if you’re in an industry that experiences high turnover, here are some things you can consider moving forward.
How Bad Hires Affect Your Customers
Regardless of your industry, end users are the ultimate consumer. A bad hire can affect every aspect of a business, from back-office to production to customer service. Once that begins to happen, you’ll find your reputation is difficult to change. A bad reputation doesn’t just affect the people who buy from you; it also affects how you’re perceived in the marketplace and will influence whether or not new employees will consider working with you.
How Bad Hires Affect Your Employees
Bad hires also harm your team. It’s the entire idea that one bad apple can spoil the whole bunch. It may be that the new employee is a negative influence on your staff and everyone begins to perform poorly. It may be that your new team member slacks off, and employees are resentful that they have to work twice as hard to do their work for them. It may be that it creates tension in the workplace, so everyone is distracted.
How Bad hires Affect Your Bottom Line
We’ve already established that a single bad hire can cost up to 30% of the employee’s wages in the first year. That’s not an insignificant amount, but it’s not the only factor to consider. Managers have reported spending 17% of their time dealing with the fall out of a bad employee, which translates to a full day each workweek lost from regular duties. A Careerbuilder survey said that three-quarters of companies who reported a bad hire said they lost an average of $14,900 in the process.
Work with an MSP
Are there ways to mitigate a bad hire? Working with an MSP for your staffing can help you streamline the process and outsource onboarding and new employee management more effectively. You can still focus on your work and employees while your outsourced team works on effective recruiting strategies and management techniques to avoid bad hires.
Can Anserteam be the right solution for you?
Anserteam Workforce Alliance represents North America’s very best staffing agencies aligned together to deliver world-class workforce management solutions. We offer end-to-end talent services that can be customized for any size business, utilizing our Managed Services Provider (MSP) model and Vendor Management Solutions (VMS) technology. Is your organization seeking a WBENC-certified diversity partner to provide measurable results and substantial cost savings? Contact us today.