Could hiring WRONG cost you $100k/pa?
Whether you’re looking to hire now or think you may need to hire in the future, hiring the RIGHT talent is extremely important to your company’s results and future growth.
How do you (or us for that matter) know when recruitment is an issue?
- Are you struggling to get things done?
- Feel your company isn’t achieving the right results or the results you expected?
- Not achieving budget or targets or timeframes
- Don’t feel you can trust your team to do what needs to get done
These are a few of what we call the “points of pain” that determine whether recruitment might be an issue in your company. If you find yourself agreeing with these issues, then you might need to think about your hiring process and start considering how to right the wrongs.
What are the common recruiting fails?
Recruitment isn’t necessarily about replacing what you’ve got, but rather putting people in place who are the best fit and deliver the best performance for your business.
Typical recruitment failures include:
- Waiting to make a change until an existing problem gets unsustainable.
- Don’t do anything until a staff member quits.
- Recruiting for skill or background companies worked for only rather than attitude and potential.
- Not doing a proper reference check (or doing any reference checks at all).
Uh-oh, do these sound familiar? Read on then.
How much does hiring WRONG cost me?
Putting the wrong person in your business not only costs you in terms of start up and lost time, but also in productivity, sales, outcomes and relationships. And when we say relationships, we mean not only business key relationships, but also the culture of your team.
If we put numbers to this problem, here’s how it breaks down:
- Minimum cost to hire someone without a recruitment agent is at least $10K to $15K
- Consider how much time it takes to get job ads up, review candidates and prepare/conduct for interviews
- Induction runs about $40 to $50K
- Factor in the cost of training, supervision time and introducing them to key relationships
- The cost of making the person part and parcel of your team from business cards and equipment to taking up other people’s time to have to watch or check their work
- Damage to your business operations, such as taking your IP, stealing your strategies, or clients could bring the cost up to $100 to 200K, depending on the size of the role.
- Consider how much it would cost your business bottom line if you lost even just one key business relationship due to a bad hire?
Your protection against wasting valuable resources on the wrong people
First step to fixing a recruitment problem: Don’t wait for the problem.
Get on top of your recruitment needs by forecasting the next 12 months of your resources (meaning your team) and think about skill sets you need for growth, what is the likely staff turnover and how to get ahead of that turnover.
In order to hire properly, you need to understand:
- Who on your team is already a high performer, and
- The characteristics of that person that makes him or her a good fit to achieve rockstar results
Then take a look at the formula we use as a guide to help and apply it to your business:
- For standard base administration roles, these roles need to deliver at least 2 times return of their total cost of salary
- We bump this formula as high as up to 10 times when we’re looking at marketing and sales executives, depending on the industry
Next, you need to consider what outcomes from this particular role will make you happy with what this person has done for the business.
Then, you recruit based on finding people who have achieved those outcomes rather than someone who has just done those tasks.
Don’t recruit if you don’t know how
Just like in your business, if you’re not good at a particular role or task, then you would hire someone to do it who is.
So you don’t lodge your financials properly, you get in trouble with the tax department and cost your business a lot of money. In that same vein, don’t try to do the recruitment if you don’t how to do it.
Hire someone like BespokeHR to help you navigate this process. We’re different from typical recruitment agencies:
- We help you determine the expectations for any given role by understanding what true high performers are for your business and role
- We get you clear on your values, mission, and everything else that you need to become a great place to work
- We map the 3 to 5 things that if the person achieves these goals in the next year, then you’re happy
- And can build everything from job descriptions, to job ads, to onboarding, and more, to get the right person in the role
Plus, we do it on a model that doesn’t include a % salary fee, like most recruitment agencies. So you save while you grow.
If your interested in a different way of doing recruitment, now’s the time to have a chat with us.