There’s a lot of different opinions on what it costs an organization when they don’t make the right hiring choice. But the bottom line that everyone agrees on is that it can run into hundreds of thousands of dollars, and it isn’t just a monetary impact – it can be detrimental to the company’s morale and productivity. And hiring doesn’t come cheap – according to a study from Monster, small business owners spend $1,872 to hire someone new.
Of course, the monetary implications are important to pay attention to. Here are just a few estimates we’ve picked up:
- The Labor Department estimates it can cost ⅓ of a new hire’s annual salary, and this increases the higher up in the organization the turnover occurs
- The Society for Human Resources Management (SHRM) estimates it could cost up to 5 times the hire’s annual salary, and that the higher the person’s position and longer they remain, the more it will cost to replace then
- A CareerBuilder survey showed that 37% of US employers surveyed said just one bad hire costs their company more than $50,000
So monetarily speaking, the costs run the gamet. Why is this so high? You have to take everything into consideration – the time it took internally to find this person, time spent training them, enrolling them in benefits, missed sales opportunities, potential legal issues, strained client & employee relationships, and potentially other lost employees.
Everyone makes a bad hire at some point – but there are ways to avoid it. Join us on October 13 for a webinar with Cassidy Coakley, International Recruitment Specialist at Tourico Holidays, where we’ll discuss how to avoid this situation, and make your interview process strategic and thoughtful to get the best candidates possible.
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