Do you know the cost of a bad hire?

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WITH the increase in employee attrition in the job markets across Asia Pacific, recruiters are spending long hours browsing and filtering the most suitable candidates from thousands of resumes available across different platforms.

Hiring a candidate is not an easy task. It involves a meticulous understanding of the profile and the Key Result Area (KRA) for the job, and then working on a plan that would help them understand a prospective candidate better. Most of the work in hiring activities involves creating a set of performance criteria to assess who is apt for a role.

 

The Cost of a Bad Hire

The entire process of hiring may appear to be easy but in reality it costs a lot for a recruiter. With the upsurge of different sources of information, it becomes extremely tedious for the recruiters to scan through the information available for candidates in different social networking sites like LinkedIn, Facebook, Twitter, etc. It is not just the investment of money but also the time that Human Resources professionals spend on searching for the right candidate.

According to Recruiter.com, the true cost comes out at a staggering USD$830,000, based on someone earning USD$70,000 and whose employment is terminated after two and a half years. The cost associated with the recruitment of a candidate includes advertising, recruitment agency fees, scrutiny of application, multiple rounds of interviews, travel and accommodation, training and orientation.

 

Hiring the Wrong Person

According to a survey done by Recruit Plus in Singapore, it was found that 99 per cent of the survey respondents felt that their organization is employing a certain percentage of bad hires, from 10 per cent to a whopping 50 per cent. Of 4,000 respondents, only 64 per cent of the survey respondents have the intention to make good their bad hires through training; 11% will live with it. The balance 25 per cent is non-committal. From the numbers mentioned above, it is evident that almost every company suffers from some degree of damage due to bad hires.

A bad hire often causes significant loss in business, which can tarnish the image of a company as well. The costs that are difficult to quantify are the low confidence of customers with the company, loss of business, and cost of disruption of the business, mistakes and failures of the candidates. One of the major losses is reduced employee morale. When an employee is terminated, the entire team can be in disarray.

 

Prevention moves

Background screening is equally important for employees. With globalisation, companies are looking to the growing markets of the Asia Pacific region to expand their businesses.

Talents from developing and under developed countries also endeavor to explore greener pastures that would allow them to lead a better life both financially and socially.

This has resulted in a tough competition as there are often many candidates available for the same position. The desire to get a good job in a top multinational company with an excellent remuneration package is so high that one does not deter from forging his/her CV.

Background screening helps in weeding out individuals with forged credentials who may otherwise take the jobs of qualified applicants. This helps in widening the scope of opportunities for deserving candidates.

A company’s success completely depends on its employees. Hence, it is crucial for every company to have a talented team. A bad team has always been a catalyst to a company’s failure.

Sustaining the talent pool and providing the employees with a safe work environment is of utmost importance for every company. Hiring suitable candidates is a time consuming process, and one should chalk out a proper hiring plan and execute it patiently to be successful in hiring the right talent.