Whether you run a business or a department in a company, you’re focused on boosting revenues. And it’s no wonder. But are you also focused on those unseen costs that could be draining your profitability?
As a leading Phoenix staffing agency, PrideStaff knows one of the simplest to overlook is the cost of a bad hiring decision. While on its surface, a hiring mistake might not seem like a huge deal, the fact is that it could cost up to five times of a bad hire’s annual salary. That’s according to a study by the Society for Human Resource Management.
So how exactly can one hiring misstep cost so much? Here’s a quick look:
Bad hires impact cash flow.
For most companies, wages and salaries make up about 70% of compensation costs. On top of those wages, you’re also shelling out taxes – in the form of federal, state and local payroll taxes. So, when you put a bad hire on the company payroll, you’re paying out a lot without getting much in return. In addition, if you fire an underperformer, you run the risk of an increase in your unemployment tax rate – potentially costing you even more.
Bad hires hurt morale.
When you have someone on board who isn’t getting the job done, or who has a toxic personality, it can impact the dynamic of the team. Considering you’re only as strong as your weakest link, this can seriously hamper your staff’s productivity. Not only that, but your top performers will likely end up picking up the slack. The could therefore grow resentful, putting them at risk for leaving your company.
Bad hires result in lost opportunities.
Every employee will make mistakes, especially when they’re new on the job. But when a bad hire consistently makes service mistakes that cost you in orders and profits, it hurts everyone on the team.
Bad hires are a headache.
Today’s business environment is fast-paced and stressful. You need people on your team who can roll with the punches and get the job done. When someone is underperforming, it causes you more hassle and headache, which can lead to added stress and burnout for you and your team.
The lesson here?
It’s better to have an empty seat for a while than to fill it quickly with a potentially bad hire.
So, if you don’t have the time or resources to devote to hiring top talent, partner with a Phoenix staffing agency like PrideStaff. We have the knowledge, proven processes, and candidate network to help you fill positions with highly skilled, qualified, dependable people. Contact PrideStaff today to learn more about how we can help you.