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Avoiding the cost of a bad hire

27 Apr 13:00 by Mark Baker

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Hiring in today’s competitive climate is increasingly challenging, which means it’s never been more important for organisations to ensure they hire the right people, first time. 

It’s no secret that one of the biggest drains on resources for a business is recruiting the wrong person. There’s a significant cost associated with employee turnover, from holiday pay, sick pay, administrative time, exit processing through to the cost of getting a replacement which includes advertising, pre-employment administration, interviewing, background checks, potential relocation allowances and training materials.

Not only this, but it can take in the region of three to six months before an employee can add enough value to offset the cost of their hiring. So, if they leave soon after that period, or even within the first year of employment, an employer may never see a positive return on hiring.

How do you define a bad recruitment decision?

Put simply, it’s someone who’s a good fit for a company, whether that’s through them not adopting a company’s core values, or failing to perform as expected. However, to suggest that a bad hire is down to the candidate alone would be misleading, as it’s just as likely to be down to the company’s recruitment process.

It’s not a question of who’s to blame for these mistakes; it’s about preventing the situation from arising through the application of proven recruitment strategies that identify the right talent to fit both your culture and expectations.

What’s the cost?

A report from the Recruitment & Employment Confederation (REC) entitled Perfect Match: Making the right hire and the cost of getting it wrong stated that a poor hire at mid-manager level with a salary of £42,000 could cost a business more than £132,000.

Avoiding the wrong hire

Match the job description to the role. It may sound obvious, but an unclear job description can attract people with the wrong skills and attitude. A lot of businesses make the mistake of copying and pasting a job description they’ve found online for a similar position. That’s why it’s crucial to spend time crafting a description that’s in-line with the role, and, importantly, reflects how the candidate will spend their time day-to-day. This requires you to evaluate the skills, specialisation, responsibilities and experience needed for the role, and speak to team members working in similar positions to plug any gaps in the job description.

Trust the experts. Consider engaging with a recruitment agency who are experts in sourcing and placing the right candidates based on the exact requirements of the role and the organisation. A good recruitment partner will spend time in your business to get a real feel for your culture, and it’s this outside perspective and input that will prove to be invaluable.

Be diligent with reference checks. Too many businesses can view obtaining references as a box-ticking exercise. However, they can provide an opportunity to gain much more of an insight than simply verifying job titles and dates of employment. Instead, try to have a conversation with the referee to ask for more information about the candidate. And always make reference checks a priority when an offer of employment has been accepted.

Stay tuned to the Claremont Consulting blog for key insights into the recruitment process and our specialist sectors.