When it comes to business, people are extremely important. Think of how much easier your life as a business owner would be if you had a solid, reliable team. Sounds like a great concept, right? I know you are tired of high-turnover. Spending time, money, effort and energy just to have someone leave or terminate someone is so discouraging to not only you, but the rest of your team. Who you hire matters and here is why:
A bad hire is a waste of money. Cost-to-hire indicates the total financial investment it takes to hire a new employee. It is measured by internal costs plus external costs divided by number of hires in a given time period. On average, the cost of a bad hire is $4,000. That’s $4,000 that you will never see a return on because that bad hire has quit or been terminated. A business owner cannot afford to continuously waste that much money on bad hires. The best option is to hire more effectively.
A bad hire is a waste of time. Time-to-hire counts the number of days between the time a position opens up and the time a candidate actually accepts the offer letter. The average time to hire is an average of 43 days. So that is 6 weeks you spend finding the right person. But, if they end up not working out, it takes you 3x that time to recover. Yes, it can take a total of 17 weeks to recover from one bad hire. Think of how much progress could’ve been made within your business if you hire the right person from the beginning. 6 weeks + 17 weeks is a ⅓ of the year. You have that long?
A bad hire damages the culture of your current team. Morale matters. Your team may not come right out and say it , but they don’t like it when you make a bad hire. It affects them for many reasons. Everyone knows that one bad apple spoils the bunch and so that hire can potentially cause your current team’s energy or work to lag. Also, naturally when your team is down a member, someone else has to pick up that slack which can be very frustrating. Making a bad hire impacts your entire culture.
So it matters who gets your next job. If you don’t hire well, you will lose time, money and the culture you have created. Reach out if you need help building your team the right way.
Barbara Mason is a career consultant that brings over 20 years Human Resources experience and has been in senior level roles for Fortune 500 companies. She is the owner and CEO of Career Pathways Consulting and her passion is helping career professionals stay, flow, or go in their career.
To learn more about working with her, visit www.careerpathwaysconsulting.com.