A bad hire can be an expensive mistake, and there are numerous factors that lead to some startling figures when an organization hires the wrong employee for the job. These factors include bottom line costs, ROI, as well as turnover and loyalty costs. In fact, one source has broken down the numbers to show just how quickly these costs can add up.
Bottom Line Costs
The following is a list of bottom line costs that add up to a total of $840,000 for one bad hire (based on a second-level manager who earns $62,000 per year and was terminated after 2.5 years):
• Hiring costs
• Total compensation
• Cost of maintaining employee
• Disruption costs
• Mistakes, failures, and missed business opportunities
Return on Investment
Hiring managers must also carefully consider the return on investment associated with a bad hire. One source suggests that employers could face -298% ROI when they hire the wrong person for the job.
Turnover & Loyalty Related Costs
It’s estimated that 75% of the demand for hiring new employees is simply to replace others who have left. For small businesses, turnover could cost around $8,000. Many employees feel that they are highly overworked, and this could be partly due to the fact that they have to pick up the slack from bad hires.
An experienced staffing partner like MDI Group can help organizations find best-fit resources and avoid making expensive hiring mistakes.
How much could a bad hire cost your organization? To read more, check out the article at Recruiter.com.