The true cost of hiring a bad recruit

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Hiring a bad recruit may seem like a mild inconvenience- a speed bump- but nothing more. In truth, the cost of a bad recruit can be substantial. In this article, the MIA’s Business Support Helpline Partner, Croner, explores the cost of recruitment and gives tips on how to avoid hiring a bad recruit…

Before we look too much into how much it costs to hire a bad recruit, we need to take a look at how much recruiting a new starter usually costs.

There is no definitive figure when it comes to hiring as there are too many factors at play to set one true cost. However, estimates can be made depending on the means of recruitment and the employee’s salary.

Now that we have a figure to work with however, we can estimate the figure of hiring a bad recruit.

Firstly, we take the figure that we have just come to and double it, as the whole process begins again, and a new starter will need to be recruited and trained from scratch. This takes us to £115,352.

Next, we need to take into account the productivity loss of training a non-suitable recruit. If a new starter doesn’t fit the role, they will likely be demotivated, or they will be motivated but unable to grasp the skills required to fulfil the role. This leads to loss of productivity and time-wasted in training. In essence, this doubles the previous figure of £15,000 to £30,000, making our overall figure £130,352.

If this figure sounds like fiction, check out some estimates made by other groups to compare.

The REC estimate that a failed middle manager hire can cost a business £132,000+

While Quarsh, a recruitment solutions company estimates that a single bad hire can cost £85,318 alone, without taking into account the cost of re-hiring for the position.

How can I avoid hiring a bad recruit?

Recruit thoroughly and effectively. Use all channels at your disposal and don’t limit yourself to a certain pool of talent. Research has shown that hiring through one channel (a job ad site, for example) will limit you to a very small pool of candidates. For a full range of applicants, utilise social media, as well as numerous job ad sites, agencies, traditional job listings, etc. This way, you attract a bigger pool, and therefore are more likely to have a suitable candidate.

Know what you are looking for and stick by it. There are always warning flags that a candidate might be a bad hire. Some of these are clear- lateness to the interview, no preparation, an inability to take responsibility for mistakes. However, some indicators are less clear. For example, an applicant might complain about a previous employer, while this is certainly a red flag in a lot of cases, the individual may have had a terrible previous experience and want to shout about it. Similarly, gaps in employment can be a warning sign, but they can also be perfectly valid. In both of these cases, ask the candidate ‘why’. A significant gap in the employment may be due to a genuine personal issue, and therefore, a reasonable absence.

Keep an eye out for the warning signs, and don’t settle for a candidate you are not sold on. As we have discovered, it is more costly to hire a bad candidate, than to wait a few more weeks to find the right one.

Expert Support

MIA members benefit from FREE advice from Croner.  Email alice@mia.org.uk or call 01403 800500 for the exclusive Business Support Helpline scheme number.

www.croner.co.uk