The cost of bad recruitment
By Lisa Spiden
When workers are not a good fit for the job, the cost to a business can be significant. Productivity may decline for a number of reasons and the impact in some cases may be long term. Here are just some of the ways that poor recruitment practices might impact a business financially:
- Managers may have to spend more time supervising the new employee.
- An employee with limited role-specific capabilities may take more time to become productive, and need extra training to build up their skills.
- The performance of other workers within the team or department may be affected in the meantime.
- Errors or delays may lead to client dissatisfaction.
- Employee morale may be impacted.
- Salary costs often represent a significant percentage of business overheads, so poor recruitment practices have the potential to make a big impact on profitability.
The cost of replacing a staff member can be high so businesses that have poor staff retention rates and low staff morale are likely to be paying a very high price for their practices. Good recruitment processes can be an essential element in business profitability – yet a survey by Chandler Macleod revealed that 6 out of 10 businesses did not have a documented recruitment plan.
Poor recruitment can affect your bottom line: Turnover of a staff member can cost the business up to 250% of the cost of the employee leaving (with sales impact, recruitment, training, onboarding, etc.) so it is important to retain your staff. One way of hanging onto them is to ensure that you follow through on promises – failing to do so is one of the quickest ways to disengage staff. For example, if you promise reviews in June – they need to be managed. Finally the majority of staff leave because of their boss – not because of pay and conditions. so you can strongly influence your productivity, turnover and output by effective people management and leadership.
Small to medium sized businesses without a dedicated human resources department may benefit from outsourcing recruitment tasks to a professional agency.