The Shocking True Cost Of A Bad Hire
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We used an example of a £100k per annum executive to answer one question: “What’s the true cost of a bad executive hire?” We factored in salary, benefits, the cost of the recruitment and sourcing process, and the knock on effects of having a poor performing individual in a role for up to a year. Using data from a range of external sources and our own databases we arrived at a final figure showing this cost to be around three and a half times more than a year’s salary. To demonstrate the scale of this cost we laid it all out in a infographic as well as breaking down how that cost was arrived at.
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The Shocking True Cost Of A Bad Hire
- 1. In 2013 It’s a problem that costs UK businesses OVER £4.13 BILLION PER YEAR £50 NOTE DIMENSIONS THE TRUE COST OF A BAD HIRE THE TRUE COST OF A BAD HIRE SO WHAT’S THE TRUE COST OF A BAD HIRE FOR A £100K PER ANNUM EXEC… £4.13 BILLION 933.38m TO PUT THAT INTO CONTEXT: BURJ KHALIFA 830m THE GHERKIN 180m THE SHARD 308m BIG BEN 96m 156 mm 85mm 0.113 mm 62% of UK employers reported a bad hire. "As a business owner or manager, you know that hiring the wrong person is the most costly mistake you can make." Brian Tracy Entrepreneur and Author THE UK 1 YEARBAD HIRES + + £30,000 Cost of new recruitment search £100,000 Up to a years salary £7,500 Car Allowance £5,000 Pension £15,000 Company bonus £9,000 Wasted investment in that person... • Induction: £4,000 • Computer and phone: £1,000 • Conferences and training days: £4,000 £100,000 Decrease in sales £18,000 Negative impact on client relations £37,000 Fall in team morale KNOCKONEFFECTSBENEFITSSALARYSOURCING £1,500 Health Cover = £355,100 £30,000 Cost of original recruitment search £2,100 Time wasted interviewing WWW.EXECUTIVESONLINE.CO.UK 01962 893 300 HELLO@EXECUTIVESONLINE.CO.UK LINKEDIN.COM/COMPANY/EXECUTIVES-ONLINE TWITTER.COM/EORECRUITMENT RESOURCES: https://www.linkedin.com/pulse/article/20130816200159-131079-employee-retention-now-a-big-issue-why-the-tide-has-turned http://www.americanprogress.org/issues/labor/report/2012/11/16/44464/there-are-significant-business-costs-to-replacing-employees/ http://www.signium.com/Portals/31/Ireland/Documents/ARE%20YOU%20GAINING%20BY%20RETAINING.pdf http://www.hrgrapevine.com/markets/hr/article/2014-02-24-high-staff-turnover-costing-business-4billion#.VD5Gx-fDlu http://realbusiness.co.uk/article/19693-what-is-the-cost-of-a-bad-hire http://theundercoverrecruiter.com/hiring-revolution-infographic/ https://www.linkedin.com/pulse/article/20130716151946-2967511-the-high-costs-of-a-bad-hire-and-how-to-avoid-them http://www.moneysavingexpert.com/insurance/cheap-health-insurance http://www.payscale.com/research/UK/Job=Human_Resources_(HR)_Manager/Salary http://www.payscale.com/research/UK/Job=Sales_Director/Salary http://www.payscale.com/research/UK/Job=Chief_Executive_Officer_(CEO)/Salary WANT TO LEARN MORE? Check out our ‘Talent Gamble’ Slideshare to find out more at: http://bit.ly/talent-gamble OR WHAT MAKES MORE SENSE? A bad exec hire can cost you 3.5 : 1 while a successful exec hire can make you 50 : 1 (a net effect of 53.5). A focus on cost rather than ROI leads to costly bad hires. +50-3.5 1 BAD HIRE CAN COST 1 GREAT HIRE CAN MAKE TheTalentGamble