The cost of a bad recruitment decision may surprise you! Besides the expected recruitment expenses, such as advertising and assessments, organisations do not consider the actual cost of an employee.
The actual cost to a company in the first year of employment is about 1.8 times an employee’s annual salary!
Below are examples of general costs of an employee. Add the cost of poor recruitment to that and then the cost of having to repeat the process. It makes sense to get recruitment right the first time.
Cost of employee:
– Office rental
– General office and reception space
– Telephone rental and calls
– Stationery
– Secretarial / administration services
– Portion of general office overheads (coffee, parking, cleaning and similar)
– Workmen’s compensation insurance
– Medical aid
– Pension fund contribution
– Sick days (allowed and paid)
– Annual leave
– Public holidays
-13th cheque
– Recruitment costs – agency, advertising, printing, telephone, medical examination, assessments and similar
– Induction costs – payroll, personnel records, relocation, training
– Loss of production due to training / “settling in” (including managers and supervisors)
+ ADD the cost of poor recruitment:
Time cost of termination – managers / supervisors involved in feedback, counselling, warnings, CCMA and similar
Administration costs – generating documents, payroll, benefits
Severance pay
Poor performance – lost business, sales and productivity
+ ADD the cost of starting the process again!!!!
AVOID HIRING THE WRONG EMPLOYEES
Test technical skills – consider skills and not only experience.
Follow a job specification – don’t give the right person the wrong job.
Interview twice or three times in different settings by different people.
Speak to referees / check out LinkedIn and other social media profiles.
Use reputable agencies with proven track records who are specialists in their field.
Interviewers should be trained in interviewing techniques, understand legislation and be able to conduct competency based and unbiased interviews.
Trust your gut! Pay attention to your instincts.
Ensure correct culture fit.
During the interview process, allow interaction with team members, colleagues, supervisors, reports.
Effective Induction / on-boarding process.
