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The “Cost” of a Bad Hire

Recently, a colleague of mine wrote a blog post called “How to Avoid Negligent Hiring.” There were some great ideas and thoughts and suggestions, but one thing that was omitted was what kind of costs were associated with a bad hire.

According to a survey by Robert Half, there are several costs. The first thing listed by respondents was lowered staff morale (39%). The second was lost productivity (34%). Monetary costs (25%) came in third place. Though they vary from industry to industry, monetary costs can be as much as three times the salary of the person being replaced.

Negligent hiring can end up costing a business.

Preventing a Bad Hire

What can be done to prevent a “bad hire?”  According to Robert Half Finance and Accounting, there are six things that should be done.

1.  Write spot-on job ads

2.  Vet the applications

3.  Do a phone screening

4.  Bring in top candidates

5.  Check references

6.  Check backgrounds

I would suggest there are seven things that should be done. The one that was left missing from this is to contact your PEO. Professional Employer Organizations can help with five of the six. A good PEO can write and place your ads (usually at a discounted cost), pre-screen the applications, phone screen the candidates, schedule times for you to interview them, and then check their backgrounds (again at a reduced cost). Some PEOs will even have recruiters on staff to help with the process.

Not using a PEO or unsure how to find one? Contact GMS today  about how we can help you prevent negligent hiring and make your business simpler, safer, and stronger.

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