**An update to the article originally written 4/29/2014.
As hiring managers and HR pros try to find and place promising marketing and creative professionals within their companies, they may start feeling the pressure. It may be challenging enough to take on employees for traditional positions, let alone jobs in emerging and rapidly growing fields. If that is not enough stress, businesses have a lot on the line in terms of finances when it comes to hiring new staff members. With one poor employee pick, hiring managers could be costing their companies a significant amount of money in new hire expenses, directly and indirectly, associated with a new hire. Here is the real cost of a bad hire:
The Cost of a Bad Hire
Financial costs add up
There are numerous ways in which recruiters can rack up sizable bills by hiring the wrong candidate for a creative job. Just think about the initial steps that hiring managers have to take when trying to fill an open position. Back in the day, applicants would magically be aware of open positions and send in their resumes all on their own. Today, that is not the case, and in actuality, recruiters have to invest ample time, energy and funds into advertising openings, connecting with people in their networks, and actively searching for prospects.
The expenses don’t end there, and after recruiters have their email inboxes flooded with applications, the real spending begins. The Society for Human Resource Management’s Human Capital Benchmarking Report found that the average cost per hire was $4,129. If this seems high to you, consider the resources utilized during the screening, interviewing and onboarding processes. For instance, if creative employment agencies decide to consider candidates across the country – or around the world, for that matter – then they may end up footing the bill for that candidate to come into town for the in-person interview. Costs including travel and accommodations, neither of which are particularly cheap. Add to that, the funds businesses have to invest in training, salaries, and benefits. From there, companies costs continue to climb.
Although contract staffing agencies would incur these costs by hiring the employees their companies need, these initial investments don’t have a real return when they can’t retain their staff members. Not to mention, there is a laundry list of other expenses that stem from bad hires parting ways with a business. There are various expenses tied to employee termination, starting with severance pay and Cobra costs. On top of that, companies run the risk of having a disgruntled former representative taking them to court, which will result in litigation fees in the very least.
Lastly, hiring a poor fit for a creative job may take a toll on staff performance and office morale. If hires aren’t able to mesh with company culture or can’t be successful at their job, they may have an impact on their colleagues. Additionally, if it seems like people are coming and going frequently, there could be a sense of instability at the office, and staff members may not be able to bond.
“Plus, whenever someone is terminated, there’s a disruption among the other employees who begin to question what caused the termination and does it affect how their performance is evaluated, not to mention the increased workload on all the other employees who have to pick up the work of the employee who was let go,” explained Jean Gamble, a Human Capital Strategist and Recruitment Specialist at Dice.
In the end, this could lead to poor performance and low productivity. This would cost creative staffing agencies in terms of lost profits, preventing them from reaching their full potential as a firm.
Steer clear from the cost of a bad hire with Profiles
With Profiles, you can ensure costs associated with a bad hire will not be a worry for you, saving you money, and more importantly, time.
Our business development managers are ready to learn everything about the position and your company so our recruiters can find you the absolute best fit for your marketing and creative tech positions.