Last July we asked “Would you make a major purchase without researching it first? Would you make a major purchase from someone you didn’t know……?” This article referred to your recruitment decisions, one of the most important and costly decisions you can make in business. It is estimated the average cost of making a poor recruitment decision is on average between £9,000 and £15,000. At Breakthrough2Performance we would like to challenge this average and put it to the test! It’s not just the tangible £’s that we should be counting – what about the intangible often overlooked costs?
We feel that the following are very conservative ‘guestimates’, provided for guidance only and loosely based on: anticipated hours, the involvement of a middle manager (earning an average UK salary of £45,000), administrative support (earning an average UK salary of £19,000) and engagement of a new employee on an annual basic salary of £25,000.
Let’s take a look at the recruitment cycle:-
Strategic Decisions: review of job role, will you recruit like for like – or make a change? How confident are you that the market-place supports this need? What do your customers want and need? What is your HR strategy for the next 6-12 months – and longer? Succession planning is there anyone internally that could fill this post? Potential Cost? £1,000
Interview Preparation: review of job description, writing advertisement, selecting your recruitment strategy e.g. in-house, agency, head-hunter, advertisement? Screening CV’s, responding to applicants and arranging interviews. Potential Cost? £6,000
Selection Process: designing interview questions and/or assessment centre, conducting interviews (telephone screening, 1st and perhaps 2nd interviews) and/or assessment centre. Making the decision! Potential Cost? £3,000
Administration: offer letter and associated new starter material, references and checks. Potential Cost? £600
First 3 months: induction, training, objective and target setting and regular 1-2-1 reviews. Potential cost? £4,000
Made a wrong Decision……?
Associated costs could include:-
· Salary and benefits costs for notice period and accrued holiday;
· Potential litigation costs (internal and external);
· Time spent on induction, training and reviews;
· Replacement recruitment costs;
· Impact on the existing team having to cover extra workload, potentially leading to absence or stress issues and low team morale;
· Impacts on business efficiency, delivery, targets and customers.
Potential Cost? Estimates are right…..£14,000 + intangible costs…
Does your business have the time or money to go through this process again?
Making the right recruitment decision for your business is critical, a well-designed selection process should be aligned to your current and future needs, replicate your own core values and be linked to other internal processes such as appraisal and reward, ensuring that performance and behaviours which are core to business success are measured, managed and rewarded!
Visit our Recruitment Page to see how we can offer a cost effective and bespoke service, aligned to your business needs, offering guidance though the full recruitment cycle from; job descriptions, competency based interview techniques and assessment centres – to easy-to-use toolkits, or workshops designed to deliver step-by-step guidance on best practice recruitment.
Or get your new employees off to that flying start by offering them First 100 Days Coaching, sessions designed to accelerate the on-boarding process by encouraging ownership for career development and promoting your Company as an employer of choice!
Spend time on one of the most important decisions you will make for your company – making the right choice the first time – every time!
