Calculate the Cost of Bad Hires

Did you ever sit down and track all the time and money that your company invests in hiring just one employee? This example will eliminate the guess work and assist you in getting a handle on how much time your company uses to try and find a suitable applicant.

Recruiting and Hiring Activities:

Estimated Time Required: Track how many hours it takes.

Developing job specifications, description, compensation package, etc.

Writing, laying out and placing ad

Screening phone calls (depending on calls you receive to an ad?)

Receiving/Viewing resumes (how many to sort to find good ones?)

Reviewing resumes depending on how many qualified ones applied.

Developing a short list of possible candidates- how many hours does it take you?

Arranging interviews -how many initial interviews would you need to schedule?

Conducting first interviews

Developing a second short list based on interviews

Arranging second interviews

Conducting reference checks

Extending an offer

Sending rejection letters

Other recruiting and hiring activities:

Total the hours up here:

Take the following recruiting and hiring activities, estimate how long each would take to complete. Once you’ve done that, total the number of hours.

You will be shocked at what you find.

This model makes several assumptions:

1./ You get a great response to your first advertisement.

2./ The first person offered the job accepts and starts.

3./ The first person hired works out for the long-term.

If any of these assumptions are wrong, your estimate could be 2X or 3X more costly.

•The Harvard Business Review points out that as much as 80% of employee turnover is due to bad hiring decisions.
•Total cost of recruiting the wrong employee includes hiring, total compensation, severance pay, and factors like legal fees, totals $840,000 when you factor all of these costs. (based mid-level manager who works 2.5 years and is then terminated and replaced.) Jorgen Sundberg, Link Humans

Adventis uses an assessment that is job specific and competency based. It is third party evaluated.  Instead of pouring through hundreds of resumes have us do a real time assessment and provide you with 2 reports on each and every applicant.  Stay Competitive



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