Unsuccessful hiring – are you aware of the true cost and the real commercial impact?

25 / Feb / 2020

You’d be forgiven for not knowing.

There is a myriad of information and a huge variation in the data provided on this topic.

By: Craig Elvin

The figures range from three to ten times the cost of the basic salary with inconsistent calculations and formulas provided to arrive at the definitive figure.

Attracting and securing talent for your organisation is essential for businesses to thrive. Equally, it is essential to know the tangible picture of how much it costs your business each and every time a hire is unsuccessful.

The background

Using the Recruitment and Employment Confederation’s (REC’s) Perfect Match Report that surveyed several thousand members, we have accurate and up-to-date figures associated with all areas of hiring, training and retaining talent. Combining that data with some clever technology, we have created the Executive Heads Unsuccessful Hiring Calculator.

In our experience, businesses are either not aware of these numbers, or worse, they have accepted them as an unavoidable cost of hiring talent.

On first viewing the numbers may seem unbelievable, it can’t be costing the business that much money? However, in reality, it is not just the salary and recruitment costs that are impacted.

Where do the costs lie?

When we discuss this issue with hiring managers, they are cognisant of the direct costs associated with hiring including unrecoverable salary costs, the cost and time of training and management costs, recruitment fees (they always know that bit!) and even lost productivity.

The elements that hiring managers don’t always consider are the indirect costs. The knock-on effects and cost to the team in handing over work to the new incumbent and then taking it back on again, the reputational damage to the department (and possibly externally) as well as the potential confidence and reputational impact. Along with the potential loss of business opportunities and indirect staff turnover, the impact is significant.

We hope you’ll find the calculator useful and hope it enables you to understand what these costs are in your business. The ‘art’ of getting recruitment right is not an easy one, but well worth investing in for the sake of your business.

If you would like to discuss your recruitment strategy and understand how we can avoid some of these indirect costs, please contact us at info@executiveheads.co.uk to book a meeting.

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Unsuccessful hiring – are you aware of the true cost and the real commercial impact?

The background

Where do the costs lie?

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