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Tax, insurance and inventory are all inevitable elements of running a business. But what about the hidden costs which factor into your yearly spending but never feature in the budget? The cost of unsuccessful hires is responsible for huge amounts of wasted money according to REC’s recent report which suggests you could be losing £132,015 per bad hire. Here are three of the ways we avoid it:
1. Getting to know potential hires properly
If a hiring process lacks attention to detail you could find yourself with an employee who has the hard skills needed for day-to-day tasks but not the soft skills or cultural fit. We endorse a multi staged interview process with group tasks designed to address how well the individual will really fit in with the company and the people, as well as individual interviews more specific to the role itself.
Internal time spent recruiting and training new employee £9,730
A prospective hire could be paid £28,000 and have incurred £1,500 costs in training
Total loss: £39,230
2. Be Specific
By defining the role you are recruiting for very specifically from the beginning you will save yourself masses of wasted time considering those who ultimately won’t meet your criteria. Consider not just the role itself but also the experience you’d like them to have, what a good personality fit would be for the team, and what you are offering them back in terms of progression and benefits. This way you can very quickly determine those who are going to match the role and the business.
Loss of productivity of a new employee £9,625 and loss of productivity of team £29,160
Total loss: £78,015
3. Properly induct new recruits
Managing the hiring process from sourcing candidates through to completing the induction process ensures a seamless beginning for new starters. REC reported that insufficient training at the start of a new job was one of the main reasons for staff later leaving or being fired because they can’t do the job properly. It is important to have enough available resource to provide inductions and an all encompassing training plan.
Staff turnover as a result of bad hire £54,000
Total loss: £132,015
About Resource Management: we provide a comprehensive range of services throughout the UK and Europe and specialise in the provision of Recruitment Process Outsourcing (RPO) and Managed Service’Provider (MSP) programmes. We have been trading for almost 20 years, providing resourcing solutions to a range of blue chip clients from SME to FTSE 100 constituents.
