The (Real) Cost of a Bad Hire
- October 17, 2023
In the last few years, and notably since the pandemic, the hiring landscape across the World of Work has presented a number of challenges.
Some businesses were forced down a redundancy route, whilst others, despite the appetite and budget to grow, were met with an apathetic talent pool and skills shortage.
What is a common challenge for all businesses, almost irrespective of market conditions, is the importance of getting hiring decisions right – the first time.
That said, with competition for the best talent on the market the fiercest it’s ever been, the time, resources and money spent on training a new hire make the investment stakes in recruitment & onboarding far too high for the hire in question to underperform. Not only does this put your company in the awkward position of restarting that recruitment process to look for a replacement, but it also means that possibly more time & resources will need to be spent to avoid such an issue the second time round.
Here we look at the real cost of a bad hire in the current market and what you as an employer can do to mitigate any risks in your recruitment process.
The Consequences of a ‘Bad’ Hire
Fact – making the wrong hiring decision costs your business money.
What is shocking is not only the number of poor hiring decisions that are made but how little hiring managers are aware of the true cost involved, especially considering how cut-throat the current market has become in a post-pandemic era. According to a study done by the Recruitment & Employment Confederation, 85% of HR decision-makers admitted their company had hired someone who was not right for the job and despite 33% of businesses not believing it to cost their business anything, it was found in the same report that a poor hire at manager-level with a salary of £42k can cost a business over £132k – more than 3 times the person’s annual salary – when factoring in costs for training, onboarding and more.
Due to significant growth in some sectors, some companies have struggled to find the right talent to meet their needs – which has led to a lot of rushed hiring decisions and consequently, an uphill struggle to adequately replace them. When considering how much time & resources are wasted on a bad hire, how much it takes to find and recruit a new one and the risk factor that virtual interviews and onboarding processes now bring into the equation, having to replace a bad hire is far too costly a venture for businesses to make in 2024.
The key is finding the right candidate for your vacancy who not only ticks the boxes in relation to the role, but who will also fit in with the existing team, who can envisage a long-term future with you, and who has room (and the desire) to grow professionally.
Hiring In The New World – What to Hire for Now?
It starts with establishing what you are looking for in your ideal hire, what they are looking for from you and how you are going to find a sizeable overlap between the two. Only when this occurs will you get the right ‘fit’ – the ideal candidate that wants to stay and build their career at your company.
However, as you will likely have noticed by now, what candidates are looking for has changed somewhat. Flexible and hybrid working now sits near the top of their priority lists as the value of an employer that can offer such arrangements is now very apparent, considering the positive impact it has been shown to have on employee performance due to a greater work-life balance.
Additionally, with candidates now in a time where they are always connected enough to express as well as access a range of opinions however and whenever they wish, they are now increasingly looking for companies with a strong employer brand. Thus, in an industry where reputation rules, how your company comes across on a cultural level to the average candidate is now more important than ever. With increased importance placed on DEI and an imperative now placed on employers to support candidates on all sides of the neurodiversity spectrum, how your employer brand positions your business to compete beyond things like remuneration and job titles and offer such candidates something more, now becomes the difference between a great hire and a bad one.
If you aren’t making the ‘right’ offer to today’s talent, you will find your applicant shortlists filled with candidates who don’t meet your expectations. When the time comes to make a hiring decision, the chance of you making the ‘wrong’ recruitment decision will then be significantly higher due to your reduced talent pool both in terms of volume and ‘quality’.
If you want to know what turns heads amongst candidates, and how to rework your hiring practices to better bridge that gap between what candidates want and what you offer, check out our guide on how to tap into what candidates today are looking for.
The Importance of Head-Turning Job Ads to Do The Heavy Lifting
When it comes to your hiring requirements, and the importance of getting the attention of the right talent the first time around, how your job descriptions are written is key. Despite how much the hiring landscape has evolved in recent years, candidates still rely on engaging and effective job descriptions to determine which role is the best fit for them personally and professionally.
Your job descriptions should not only be informative about the role but should also be easily accessible, communicate your EVP clearly, be transparent about the candidate experience during and after hiring and ensure inclusivity in all stages of the hiring process. It’s also important to consider whether the skills and personality traits you usually look for in your employees have changed. Many specialisms have exploded since the pandemic, you may want to ensure your job adverts aren’t alienating the right talent with hyperbolic language or setting rigid and unnecessary requirements that can deter otherwise well-suited candidates.
Mitigating The Risk By Enlisting The Help Of Experts
Whilst the hire/no-hire decision ultimately comes down to the company in question, using the services of a specialist recruiter will also help to ensure that only the right candidates are short-listed from the get-go. Not only will using a 3rd party save time – especially in the early stages of reviewing CVs and applications, you will also have access to passive talent; widening the net and ensuring that the role(s) in question are visible to a much larger talent pool.
What’s more, many agencies also offer retained services as well as contingency, with additional features designed to impact the likelihood of a successful outcome.
This model is often more rigorous in nature and may include additional features such as:
- Bespoke market mapping
- Salary benchmarking intel
- Psychometric testing
- Video interviews and candidate profiling
- Dedicated Account Manager or team of specialist consultants<
- Regular face-to-face updates and reporting/analysis
- Strategic headhunting
- Integrated marketing campaigns including advertising
Whilst there is no absolute guarantee that your new hire won’t leave through utilising a recruitment agency, the belt-and-braces approach and additional screening will undoubtedly help to mitigate that risk.
Remember that if you want to avoid making the wrong hire, you need to find candidates who are truly a great fit, not someone who will be looking for a new role in a few months. It starts with plugging in those gaps in your value proposition (and communicating that expertly) but it certainly doesn’t continue without enlisting specialist help in the recruitment process. If you find yourself in a position where your hiring struggles are best dealt with alongside a recruitment expert, you’re in luck. At Clayton Recruitment we pride ourselves on turning such struggles into success stories and with a team of experienced consultants on hand to help, we can deliver you the right fit, first time. Give us a call on 01772 259 121 or get in touch here.
About Clayton Recruitment
Clayton Recruitment has been partnering with organisations across the country since 1989, and during that time has built up an excellent reputation for trust and reliability. With specialist divisions covering Commercial, Financial, and Engineering appointments, on a permanent basis.
If you are looking for your next career move, we can help. Call us on 01772 259 121 or email us here.