Hiring new employees isn’t as simple as finding a good candidate and offering them the job. Human Resources and Employment Law experts have seen an increase in outsourcing employee recruiting because it is so difficult to find and hire the right employee. Today, most new hires weren’t even searching for a job, says the Harvard Business Review: the are actively employed and sourced through LinkedIn and social media!
There’s an old HR saying…
Think it’s expensive to hire the right employee?
Think how expensive it is to hire the wrong one!
The cost of a bad hire isn’t simply the lost time to recruit them and any wages that were paid: there are many hidden short and long-term costs when you don’t hire the right employee. When business owners are building or expanding their companies, hiring the right employee is key to achieving their business goals.
The Cost Of a Bad Hire
The true cost of a bad employee hire is much higher than most employers realize. “The cost of recruiting, hiring and onboarding a new employee can be as much as $240,000,” reports SHRM, the Society for Human Resources Management. Hiring is always challenging in the best times, but sourcing and recruiting high performing employees is a skill that can be taught and developed.
When recruiting, interviewing and hiring a new employee there are key signals the hiring team should consider when evaluating applicants:
- Employment History
Does the employee change jobs frequently to climb the career ladder, or do they change frequently because of employment problems? Are there - Company Culture
Is the applicant a good fit with your team and clients? Do they have the social skills that you need? Do they have a good relationship with their current employer and co-workers? - Technology Skills
There’s an assumption that everyone under 40 knows tech and social media – but that’s simply not the case. Many people aren’t comfortable with technology and prefer more “traditional” job skills. - References
Hiring 101 says to always check references, but surprisingly many small business owners do not, instead relying on their “gut feeling” about a candidate.
Hidden Costs of Bad Hires
What are the hidden costs of bad hires? Whatever you think the cost is for a bad hire, experts say double or triple it! “For a small company, a five-figure investment in the wrong person is a threat to the business,” says Forbes. There are significant intangible costs to hiring the wrong employee:
- Burning out good employees who take on extra work to compensate for employees that aren’t delivering
- Low morale, reduced productivity and poor customer retention may not be immediately evident results when you don’t hire the right people
- Your company can develop a bad reputation when unrecognized bad hires are on in the front line with customers
This infographic by Resoomay calculates the hidden costs of hiring the wrong employee.
An experienced business law attorney can advise you on resources to recruit and hire the right employee, and help you with negotiations and avoiding litigation if you make hiring mistakes.
The experienced business law attorneys at Farmer, Farmer & Brown provide legal counsel and representation in various areas of corporate law: you want more information contact us by email at info@ffbfirm.com or call 770-422-4241.