An infographic created by Resoomay explores the baffling costs of making a bad hire, and it’s certainly information we thought was worth highlighting. Check out a few of the startling statistics – no doubt you’ll be surprised:
- Between hiring costs; total compensation; cost of maintaining the employee; disruption costs; severance; and mistakes, failures, and missed business opportunities, an employer’s average cost of a second-level manager bad hire is $840,000
- Missed business opportunities from a bad hire can cost their employer in the region of half a million dollars
- The ROI of a bad hire can be as awful as -298%
- The average cost of a new employee (not including training costs) is $57,968
- In 2009, estimates show U.S. organizations spent $125.88 billion on employee learning and development
- For a small business with only 64 employees, the cost of turnover is just shy of $8,000
- 75% of demand for new employees is to simply replace workers that left a company
When the costs of a bad hire are this baffling, is it any wonder employers think twice before taking hiring chances?
Preventing a bad hire
So what are the steps to protecting your business from a bad hire? Well there are quite a few, but primarily it’s all about implementing thorough employment screening and background check programs to ensure the people they’re hiring are right for the position.
Three key steps we would suggest:
1. Run background checks
A background check on an applicant may pick up on some negative information about them, which could certainly save you from problems in the long term. This type of screening could include criminal checks, education verification or checking their previous employment history.
2. Check references
In this economy, many people are unemployed and desperate for work. One of the principle ways that applicants “spruce up” their resume is to provide false references. Make sure that their references are verifiable, and the people they list are trustworthy.
3. Perform a drug test
The cost of drugs in the workplace is severe, so to avoid potential damage it is always a good idea to drug test applicants. By doing this, you are ensuring that any new hires will be reliable and productive workers.
Want to learn more? Get in touch and we can discuss a screening program to suit you.