The True Cost of a Bad Hire
Businesses often hire when their needs are no longer quiet whispers but rather have grown to screaming gaps in their talent pool. Time is frequently condensed compromising the recruiting, vetting, and onboarding processes. Whether part of a startup or a globally established company, hiring managers frequently settle for less than ideal hires leading to material costs to the organization.
Zappos CEO, Tony Hsieh, estimates that bad hires have cost his company more than $100 million. The Department of Labor says the price of a bad hire is at least 30 percent of the employee’s first year earnings. Finally, a well-known recruiter estimates the cost of onboarding an employee at $240,000.
The bottom line costs that go into this total sum include hiring costs, workload increase during position vacancy, total compensation, cost to maintain employees, severance and missed business opportunities.
How do bad hires make such a large economic impact on a business? Because bad hires have three main methods that negatively affect the team members that surround them.
• Their Negative Attitude Spreads: Disengaged, negative attitudes are infectious. Bad hires project these attitudes through their constant complaints, body language and disinterest, which leads to their coworkers rethinking their interest level toward their own work.
• They Burn Out Their Colleagues: When a bad hire doesn’t complete the full list of duties presented to them, the good employees start to burn themselves out making up for the lack of production.
• They Harm Company Culture: Finally, company culture is severely impacted when a bad hire starts to interfere with the rhythm of a strong business team. Bad hires lower the bar of expectation, influence bad habits, and create frustration amongst employees.
By hiring a freelancer to fill vacant roles, you have more time to find the right person for the position without losing on productivity or overworking your other employees. There are four ways a freelancer proves to be a solution to the bad hire dilemma:
• Freelancers Offer Flexibility: Freelancers are typically paid in hourly or project based increments, which provides more flexibility and can be less costly for the company while seeking a new employee.
• Freelancers Can Be Hired On-Demand: A freelancer allows the business to fill the gap quickly, therefore, reducing the cost of workload increase during vacancy periods.
• Freelancers Enable Companies to Hire the Right Person: With a freelancer, a company has more time to look for permanent replacements because the freelancer can complete the task requirements needed while the business can focus their attention on the talent search.
• Freelancers Provide a Way to “Try Before you Buy”: Finally, if a business finds that they are impressed with their freelancer’s work and the person is a fit for the company, then they may have the option to hire them full time. This provides a way to vet a potential employee with a longer integration process while maintaining the efficiency of your office post-vacancy.
Often bad hires aren’t detected until they are fully integrated into the work place. Hiring a freelancer is a low-cost alternative that allows the business the time it needs to make the best and most efficient hiring decision for the company.
Canopy Advisory offers high-quality freelancers with a decade or more of big brand experience, expertise, and flexibility to help smooth out your hiring process. Contact us today to learn more.
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