The high cost of a wrong hire

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Have you ever hired the wrong person?

If you answered ‘yes’, you are not alone.

A survey from CareerBuilders shows 74% of employers have hired the wrong person.

Besides the HUGE headache it creates for you and your organization, there is real monetary cost to failed hires, whether you have to fire the employee or they eventually quit.

Considering all of the factors that are impacted by a wrong hire, Talent Management and HR Magazine estimates these actual costs:

  • For entry-level employees, it will cost between 30-50 percent of their annual salary to replace them. For a $35,000 position this is $14,000.

 

  • For mid-level employees, replacement will cost upwards of 150 percent of an annual salary. For a $60,000 position this is $87,896.

 

  • For high-level or highly specialized employees, you’re looking at spending 400 percent of their annual salary. For a $100,000 position this is $400,000!

This is not money any organization can afford to risk. (And certainly not yours.)

Yet every time you hire someone to join your team, is a day you potentially risk making a mistake that will cost you money and increase stress across the organization.

It may be time to take a different approach to hiring and retaining the right team.

Here’s a great place to begin.

  1. Get clear about the results you ideally want this person to achieve for your company.  Not a list of tasks, but the ideal results you want the individual to produce.

‘Creating and sending out a monthly newsletter’ is a task.

‘Expanding the organization’s marketing audience by 20% in six months’ is a result.

Articulating desired results immediately gets the job seeker thinking, curious, wanting to be creative – in effect stating that you want your players to take responsibility.

2. Take a hard look at your job descriptions.  Are they full of boring ‘to-do’ lists minimizing the position and the person even before beginning?

Get rid of that to-do list and replace it with a description of desired results.

3.  Identify the ideal qualities for this position.  This will depend on the position.

Does the position require the team member be comfortable following proven established steps or do they need to be comfortable creating those steps?

Does the job require a lot of research or is the team member expected to take short cuts to get to the results in the quickest way possible?

These different qualities will attract very different people.  It is so helpful to be clear up-front so people begin to self-select in or out of the position.

4. Use the job description to share the organization’s vision in creating a better world and how this position specifically contributes to that vision.

If people know how and why this job is critical to the organization, especially nonprofit organizations, your organization will be more attractive to candidates.

In this hyper-competitive job market, your job description is as much a marketing piece as it is a recruitment tool.

Next blog topic: How do you select the ideal person for the job?

Are you a non-profit CEO with revenues over $5 million who is committed to stop hiring the wrong the team members?

Click here for an invitation to an Executive Roundtable on Friday, April 13th from 9:00 am to 11:30 am to explore how to create cutting-edge recruitment and retention practices for non-profit organizations.

You will be with a small group of your peers who have been there.  Make Friday the 13th your lucky day.

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