What’s the True Cost of Your Hiring Strategy?

The same lesson applies to your hiring strategy: opt for a low-cost solution at the expense of quality, and (absent of supernatural luck) you’ll wind up with a plethora of hidden expenses and repair costs. In fact, according to a SHRM study, hiring the wrong person could cost up to five times a bad hire’s annual salary.

It is imperative that you invest in a proven process of getting the right person in the right seat, and you’ve made a purchase that will continue to reward your company over the years. 

Hiring the wrong person results in two different types of costs: the cost of that hire staying at your company and the cost of that hire leaving. 

Here are some of the costs associated with a bad hire staying at your company: 

The cost of new hires who aren’t aligned with company values.

• When employees don’t share a heart for company values, they are less motivated and more likely to leave. A hallmark of our Titus Hire 4 Performance process is our careful attention to an alignment of values between the candidate and the organization. Securing this alignment sets both parties up for a satisfactory, long-term relationship. 

The cost of hiring a low performer.

• Predicting how well a job candidate will perform on the job is a science. An informal process simply doesn’t do the trick. As the name suggests, our Hire 4 Performance process is laser focused on hiring the person who will get the job done. 

A poorly suited new hire can bring down morale.

• Your A-Players might become skeptical about company hiring processes. Employees may look at the new hire and think… How did this person get here? Or even: Why wasn’t I promoted into that seat? Feelings of injustice or lack of confidence in company processes incur the cost of employee morale and productivity. 

Damaged reputation with customers.

• If a bad hire is client-facing, you can expect to take a hit when it comes to customer reputation. You may lose a customer or require an A-Player to step in and smooth things over. 

What if you fire the bad hire or they leave by choice?

While a low performer leaving is a good thing, it is not without costs. Here are some of those expenses: 

The cost of an empty seat as you re-start the hiring process.

• This expense grows depending on the level of responsibility in that seat. 

The cost of re-hiring.

• It’s back to the drawing board, and the costs of recruiting begin once again. 

The impact on the team.

• Lack of a steady team causes lapses in productivity and doesn’t give the team a chance to find peak collaboration. Those who worked closely with the bad hire must adjust to their absence, and then adjust to the replacement hire. 

The loss of your initial investment onboarding the new hire.

• The resources spent onboarding and simultaneously compensating a bad hire become a loss for the company. 

The loss of your recruiting costs.

• In addition to the onboarding costs, you can’t get back the time and money spent recruiting a poorly suited candidate. 

How about some of the benefits of hiring the right person for the right seat? Great organizations succeed because of their people. Having the right people in the right seats is central to organizational success. A-Players push the company forward through innovation, proactivity, above-and-beyond effort, and championing company values. 

The lesson is clear: an investment in a quality recruiting process can save you massive amounts of company capital. Buy the better car and pay the cost of a proven recruiting process to ensure a substantial return on investment. 

Want to train your hiring team in our H4P process? Contact us today. 

Interested in outsourcing your hiring needs to Titus? We’ve got you!