As a business owner or office manager, you know the headache of hiring new employee. Basic hiring tasks, such as advertising, sorting through resumes and checking references, all take valuable time and resources. Add to that the time and cost associated with orientation and training, and the costs begin to add up quickly.
Even worse is when, after all this work, you end up hiring the wrong candidate. The new employee can’t get the job done, isn’t a good “fit” for the office or brings a toxic attitude to the workplace. This one wrong decision costs your company time, money and resources. Much more than you may think.
Standard Recruiting Costs
Whether the employee’s termination was voluntary or involuntary, your job now is to fill the vacancy. This means starting the recruiting process all over again. According to a survey recently completed by the Society for Human Resource Management, companies spend an average of $4,100 to fill just one position.
These costs include advertising, interviewing, assessment tests, credit and reference checks and more. If you are hiring for a professional position, costs can reach to two or three times the annual salary of the position you are filling and include expenses like travel costs, moving fees and sign-on bonuses.
Hidden Costs of a Bad Hire
With recruiting costs so high, you might be tempted to keep a bad hire just to avoid the headache of hiring a new employee. That decision could be even more costly than your standard recruiting costs. According to one study, your company could lose as much as $12,500 by keeping a bad hire.
Just one bad employee could diminish employee morale, create workplace conflict and decrease productivity, regarding both quality and quantity. Even more importantly, a bad employee may provide poor customer service, which reflects on your practice’s overall reputation. If a toxic employee is not dealt with quickly, you could see both current patients and top staff members leave. This combination can be devastating to your company’s profits.
No Rush Decisions
Of the business managers asked, 43 percent admitted that they made bad hiring decisions because they were in a hurry to fill the position. While a vacant position can put extra stress on your staff, this is nothing compared to the stress caused by a toxic employee.
Experts recommend always taking your time to vet every applicant and never solely relying on your “gut instinct.” Instead, use a variety of hiring tools, such as interviews, assessment testing, and reference and credential checks. Once you hire an employee, be sure to complete regular evaluations and document everything. This will put you in a better position if you do have to let the employee go.
At BWTP, we want to be more than an accounting firm. We want to be a resource to help you with all areas of your business! Call us today for a consultation.