It can be costly to hire and onboard a new employee — an expense that is well worth it when your new hire is productive and successful, but results in money going down the drain when they are not.
In reality, the cost of a bad hire is much higher than you might think. So, how can your business avoid the hefty cost of employee turnover? Professional staffing agencies just may be your key to success. We are here to break down what these costs truly look like and how working with a recruiter can help you overcome them!
Understanding the Cost of Employee Turnover
There are some costs of employee turnover that are obvious. For example, when you have to let a bad hire go, you know all the work assigned to them is no longer being done. This means you may have to contract temporary or freelance employees, pay other employees overtime to help make up their work, or fail to deliver on client deadlines. These can all result in lowered employee morale and negatively affect your bottom line.
However, there are also hidden costs of a vacant position that can be easily overlooked. When you make a new hire, you probably aren’t anticipating it to go wrong. After all, you wouldn’t have hired them in the first place if you knew they weren’t going to work out, right? When you’ve already spent valuable time and resources on interviewing, hiring, and onboarding an employee you thought was the right fit, it can be a shock to realize they actually aren’t. Now, you’ll have to repeat the whole process to find their replacement — which you likely did not factor into your budget or timelines.
So, what is the true cost of a bad hire? According to a Harris study, 41% of employers said that the cost of a bad hire was greater than $25,000, and 25% said it was greater than $50,000. This was greatly dependent on the position — a role with a higher salary that requires more specialized skills and experience will have a greater cost of employee turnover, because it will likely take you longer to find a qualified replacement.
Now that you know the true cost of a bad hire, you understand that hiring the wrong person for the job isn’t just a harmless mistake. You’re probably asking yourself: “How can my business avoid these costly consequences of hiring the wrong person?”
Turning to professional staffing agencies drastically increases your chances of placing the best candidate in the right position the first time around — effectively minimizing the risk of dealing with the cost of a bad hire. Here are a few ways how:
Gain Access to In-Depth Recruiting Experience and Expertise
As a business owner or manager, recruiting and hiring is likely not your exact area of expertise. However, recruiters at professional staffing agencies maintain extensive knowledge of recruiting best practices and hiring trends from working with a wide variety of clients and candidates. One of the major benefits of working with a staffing agency is that they can bring these insights directly to your business.
Working with a recruiter can help you identify your workforce goals to form a recruitment strategy that aligns with it. Then, the professional staffing agency will source and screen candidates on your behalf that match your requirements and expectations. This way, you aren’t just making hires to fill open desk spots — you’re making strategic hires backed by experience and expertise.
Have a Partner Focused Solely on Recruiting
You and your employees already have a lot of day-to-day business responsibilities to worry about, meaning that certain internal recruitment tasks often fall by the wayside. This behavior may seem minor in the moment, but it can add to the cost of a bad hire later. For example, 11% of respondents in the Harris study claimed that a bad hire was made because the candidate’s references were never checked.
In this case, it was likely a time crunch that caused these employers to not check the candidate’s references. If they had taken the time up-front, they may have caught wind of an issue that would have prevented them from selecting this candidate in the first place. Third-party recruiters can be a valuable partner for your business because they are solely focused on recruiting — unlike your internal employees who are busy working on numerous ventures and tasks at once. Professional staffing agencies will have the proper time and resources to dedicate to sourcing and screening candidates, ensuring that no necessary steps are missed simply due to time constraints.
Choose from a Wider Pool of Qualified Candidates
Reputable professional staffing agencies attract top-tier talent, and therefore have access to a vast pool of qualified candidates. Working with a recruiter who is constantly expanding their professional network and maintaining relationships with both active and passive job seekers means they can connect with those job candidates on your behalf.
For example, at 4 Corner Resources (4CR), we often source and screen hundreds of candidates’ resumes for a single job opening to find the best fit. A job posted by an internal recruiting team may not yield nearly the same volume of applicants, meaning you could be missing out on your ideal employee simply because they never saw your job posting. When you are able to place the most qualified candidate in any given position the first time around, there is no need for turnover — or the costs associated with it.
Experience an Expedited Hiring Process (Without Sacrificing Quality!)
According to the Harris study, 38% of respondents who made a bad hire identified the need to fill the job quickly as the main reason behind hiring the wrong candidate. While your business wants to minimize the lost productivity from a vacant position, settling for just any replacement instead of the right placement can actually cost you more in the long run. If an employee is let go or leaves for another opportunity, and you rush to find their successor, who then has to be replaced again, you’ve now spent double on recruiting and onboarding costs.
Working with a recruiter can help you get new hires up and running more quickly through an expedited and streamlined hiring process. At 4CR, our goal is to have a fully-screened and qualified candidate for non-leadership roles within just 48 hours. With this optimized hiring process, the right new hire can be placed and onboarded faster — meaning they won’t need to be replaced soon after and can start actually producing value for your business.
Minimize the Cost of Employee Turnover by Working With a Recruiter at 4 Corner Resources
If your company is having trouble identifying best fit candidates and experiencing heavy turnover, it is probably time to turn to professional staffing services. At 4CR, we can help you avoid many of these shortcomings that are experienced when relying solely on in-house recruiters.
We’re consistently ranked among the top Orlando staffing agencies in Florida — because we attract, screen, and place the right candidates the first time around. By doing so, we enable organizations to reduce the risk of turnover and minimize the cost of a bad hire.
To see how our high-quality professional staffing services can help your business overcome the cost of employee turnover, reach out to one of our experts today!
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