The organization has been flattened, the fat cut, and productivity scrutinized. Maybe the Jack Welch strategy of canning the lowest 10% each year has been put into place. So what else can be used to grow the bottom line? Effective selection and hiring processes as well as good retention strategies.
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What Does a Bad Hire Cost?
The costs of a bad hire can be staggering when examined carefully. Low estimates from the American Management Association are 1.4 times the employees annual salary. Obviously the higher the pay level the higher the cost of a hiring misfire. Estimates have ranged from 140K to as high as 750K.
Retention of top talent is a key area for your organization. Some estimate the costs associated with employee turnover can be as high as $350.00 per $1000.00 of the annual wage for the position. |
There are many “hidden” variables that can affect the impact of a bad hire or employee turnover. The more obvious ones include wasted recruiting, interview, and training costs. Furthermore, Productivity decreases while new hires are being brought up to speed.
Some not so obvious and hard to calculate costs occur from:
• Disruptive effect on co-workers;
• Poor customer service; and
• Unemployment compensation and potential legal costs.
 We Can Help Your Company Today.
We have a number of ways to help minimize the chances of a bad hire. We work with proven objective assessments to give you a deeper picture of your ideal candidate's psychological makeup. We can create a custom profile of successful incumbents to provide you a template for your selection process.
We can also implement Lominger's® Recruiting Architect to develop the best interview strategies and systems for different positions. The Recruiting Architect enables you to use consistent metrics in your decision making process. Using these principles and others we will create successful hires and effective retention strategies for your company.
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