The potential growing financial impact to the business of replacing staff extends beyond external and internal recruitment costs.
Research by the Recruitment & Employment Confederation (REC) reports:
- A poor hire at mid-manager level with a salary of £42,000 can cost a business more than £132,000.
- The hidden costs involved in poor hiring decisions include money wasted on training, lost productivity, and increased staff turnover.
- 85% of HR decision-makers admit to making a bad hire, and a third believe these mistakes cost their business nothing.
- 39% of employers admit that the interviewing and assessment skills of their staff need improving.
If you choose to measure cost-per-hire, hidden costs need consideration, such as:
- The cost of onboarding a new employee including training, supervision and management.
- The impact to productivity whilst a position is vacant, and the new employee reaches optimal performance.
- The cultural impact on the business and employee engagement.
- The potential commercial impact on clients and customer service.
- The lost financial investment of training and development of the departing employee.
- The cultural impact on the business and potential knock-on effect with other employees.
With economic uncertainty, shortage of skills and rising costs associated with replacing staff, investment into good recruitment practice is an additional incentive for businesses to eliminate poor hiring decisions.
How can NRG help?
Our specialist consultants will work with you to understand the values, culture and strategic goals of your business. We will provide advice on a fair and transparent recruitment process, enabling you to make an informed and measured decision on your investment towards recruitment, and avoid financial risk.
Choosing the right recruitment partner can save your organisation a substantial amount over time, thus adding value at every stage in the hiring process and helping you to find the best possible candidate for the role.