Many are unaware of the cost of a bad hire, and especially small business can suffer greatly.
Costs can include:
-
– Wasted salary 1 to 6 months, 8.5% – 50% (% of annual salary)
– Recruitment costs and time, 5% – 40%
– Training costs (and time), 5% – 20%
– Impact on rest of team 5% – 50%
– Missed/ delayed business deliverables. Failures 0% – ?
So the total cost of a bad hire is probably a minimum of 25% of their salary but could be over one and a half times their annual cost.
People should be viewed as an investment and not a cost, so taking these 5 tips into account may make your new hire a good one.
1. Find the right personality type
– Before you hire someone make sure to first clarify:
- what kind of job do you need done? (sales, detailed tasks, technical)
- what kind of skills are necessary for this job?
- what kind of person is suitable for this job (DISC)
2. Ask the right questions
- personality testing
- reference checking and
- ask what motivates the candidate so you know how to reward them.
3. Hire the person for the job, not the one you like the most
Unless the candidates job is to be your best friend, don’t hire people because you like them. Of course getting along and culture is important for a healthy work environment, but it’s actually more important that the person can get the job done than attend afterwork drinks. Awkward communicators however are best suited for back end jobs.
4. Take your time to find a good match
If you can’t find someone keep looking. Perhaps you can hire a contractor or intern to help out while you are waiting. People who are rewarded for results are more cost effective, especially for smaller companies.
5. Plan your induction
It doesn’t end at signing the contract, it begins. Too many people forget to plan for the induction and waste a lot of time in the first 3 months. Make sure to prepare for new staff as they will take time from you and your other staff to get up to scratch, even experienced candidates. Make a training plan, use goal sheets and task lists, and explain early on that you expect the new person to learn on their own so they need to be confident and driven.
For young hires, I prefer interns, even if you are not looking for people right away. Welcoming young people into your business in their training period can be great because you all know it’s a learning curve and you are both supported by training plans. Interns can make process maps for your business, do research and put new theory into practice before you need them.
Should it not work out, you haven’t lost anything. If you see a new hire in the making, great!
your team is growing.
