How to reduce the cost of a mis-hire
Being a business executive or business owner, you have surely hired people before that did not perform as expected. These are commonly called mis-hires. Mis-hires cost a company an astronomical amount of money. Money that could have been put to much better use! How can the unnecessary cost of a mis-hire be reduced?
Calculating the cost of a mis-hire
There are many mis-hire calculators available, which – guaranteed – will be an eye-opener. Without going into all the detail here, consider the following:
- Total costs of hiring the person (recruitment fees, placement fees, record checking, HR time and admin costs, relocation fees and more)
- Compensation (number of years with the company X base salary, incentives, stock options and more)
- Maintaining the person in his/her job (sum of all years, including computer equipment, training, furniture, admin assistant and more)
- Total severance package (severance fee, lawyer fees, admin costs and more)
The above factors are obvious. However, the following 3 factors are often not considered when calculating the cost of a mis-hire:
- Cost of mistakes or failures: missed and wasted business opportunities, e.g. drove a key customer away, impaired customer loyalty and more
- Disruption: lower morale, lower productivity, impaired teamwork
- Wasted hours: number of additional hours others had to spend dealing with the mis-hire’s weak points, patching things up with customers, etc.
These all add up. According to Bradford D. Smart in his book “Topgrading”, research shows that mis-hires cause an average of 300 additional hours worked by others in the team. And teams often say “Mis-hires are far more costly and waste far more time than we assumed”.
How to reduce the cost of mis-hires
There are other alternatives, apart from investing in, and implementing top-notch recruitment, selection and retention systems.
Go the route of appointing contract employees.
Benefits of contract employees
- Are a flexible workforce that grow with your business needs
- Enable business leaders to drive strategic results without employing permanent resources
- Enable business leaders to scale execution capacity with high-performing, off-payroll individuals
- Alleviate the HR burden
- Take the pile of CVs off your desk, onto someone else’s.
Ultimately, contract employees reduce the risk, and cost, of mis-hires.
CoLAB Talent Placements
Considering appointing contract employees? Connect with CoLAB Talent Placements.
CoLAB Talent Placements is part of the CoLAB Profit Improvement group.
CoLAB Talent Placement is all about
- Flexible off-payroll resource capacity that matches the need of our client
- High-performing people without the HR burden on your company
- Reduced mis-hires through the temp-to-perm journey.
In addition to the above, we also provide value-added services, including onboarding of our resources in our client’s organisation and frameworks.
Read more HERE.
Reduce the cost of mis-hires
Business leaders don’t have to face the challenges of under-performing resources and the high cost of mis-hires. Rather focus on driving your business strategy while having a flexible, off-payroll, high-performing workforce, powered by CoLAB Talent Placements.
Connect with CoLAB today. We specialize in matching your requirements for competence, character and chemistry, with high-performing resources. firstname.lastname@example.org
Alternatively, if you want to discuss more benefits of employing contract resources, reach out to us on THIS LINK for a quick Discovery call.