The Cost of Making the Wrong Hire

Good hires can be a powerful catalyst for positive change in your business. So, it stands to reason that making the wrong hire can also hurt your business. Do you know how much bad hires could cost you?

According to research conducted by the Recruitment and Employment Confederation, a bad hire for a position with a salary of $50,000 can lead to a cost of $150,000 for the company! So, what makes up this cost?

Cost of lost productivity. How much does the new employee slow down your well-oiled machine? Research from Oxford Economics suggests a new employee can take an average of 28 weeks to get up to speed and produce the same level of work as the person they have replaced.

Advertising and recruitment fees: whichever route you take, there is a cost. Advertising yourself may seem cheaper, but there will be far more man-hours involved, wading through perhaps hundreds of applications and dealing with the unsuitable ones.

Interviewing costs. How much is your hourly billable rate, and how many interviews take place to hire one person?

HR and training costs such as onboarding and setting up a new employee with tech and systems

Management spends additional time and energy trying to bring underperforming new employees up to scratch.

While many people focus on the cost of a wrong hire in financial terms, just as important is the effect on morale and culture. Why? We all know that a bad apple spoils the bunch, so to speak. When the wrong hire does a bad job, good employees get burnt out making up for it, and the longer that goes on, the more you risk their frustration increasing and potentially losing good employees. It’s also reported in a study by Warwick University that happy employees are up to 12% more productive. The effect on company culture can be contagious. Poor performers can lower the bar for other employees, and bad habits can spread like a virus.

Stop Making the Wrong Hire

Here are some tips to getting the right sales talent for your business:

1. Go with your gut. Often, when a hire doesn’t work out, you realize you had concerns or questions all along. The solution is to put more trust in your instincts and not ignore any red flags.
2. References: Take every opportunity to check candidate references and talk to people they worked for and with. So many businesses either don’t take references or just get a basic reference confirming he worked at Company X from Date Y to Date Z.
3. Date and date again before marriage. Don’t rush into a job offer after one meeting; take your time to meet candidates on multiple occasions and in different scenarios. We’ve known employers take potential senior hires out for dinner, for example. Another option is to take the candidate on for a trial period if possible; this can be great for both parties to assess the fit before committing.
4. Set clear expectations. Be clear through the interview process about your expectations for the role, and we would always advise quickly setting objectives and KPIs for their probation period once someone has joined. Then, if expectations aren’t met, there shouldn’t be any surprise on either side if you take decisive action and move on. After all, every business and every leader will make a bad hire in their lifetime; there is no magic formula to make every new employee a great one. But if you hire carefully, it’s also important not to dwell on the mistakes you make when hiring and let things continue longer than necessary; be decisive and cut your losses.

Work with Smart Talent Group today!

Working with us can help you avoid making the wrong hire and also mitigate the costs.

Our sales recruiters are market specialists who are dedicated to your business’s success. We know how to reduce your time to hire and can effectively advise you on everything from market conditions, job specs, and salaries through to interview training. Not only that, we pride ourselves on reducing the amount of time you have to spend reviewing and interviewing candidates.

We thoroughly interview all the candidates we represent. Understanding their motivations and ambitions means we can match them with the right environments for them to flourish. We’ll take a detailed brief from you, and we’ll want to know about the ‘fit’ of your organization so we can shortlist candidates whose aspirations and character match your own.

We also use a specialised sales assessment to understand the depth and quality of the hire and its alignment with your business. 

We offer a 3-month free replacement should any candidate you hire through us leave within the first 3 months, and we’re also willing to offer flexible payment terms, firmly believing in a partnership approach.

Throughout the interview process, we will take feedback from you and the candidates, and we’ll advise you of issues as they arise. That could be that the candidate you favour has other interviews and you need to speed up to secure them, right through to passing on red flags that you haven’t spotted.

This is down to the very honest advice and help we give and the successful introductions we make. Our ethos is the very antithesis of bums on seats.

If you are looking to work with sales recruitment specialists to find the right hire for your business, talk to our team at +61 433 127 327 or email us today at info@smarttalentgroup.com.au