No matter what size of recruitment business you’re running, the costs of hiring a bad recruiter can be crippling – and we’re not just talking monetary costs either. As recruitment business owners, sourcing right-fit candidates for clients is in our blood, but for some reason, our weakest point tends to be hiring for ourselves!
Your new hire may have charmed the socks off you at interview stage, but are the signs appearing later that you may have made an error in judgement? It’s easy to think that any hire is better than no hire when you’re completely snowed under and your recruiters are complaining that they have so many jobs on but not enough hours in the day to give them the attention they deserve.
But the costs of hiring indiscriminately into your business can be counter-productive and damaging in more ways than you’ve probably considered.
The costs of hiring any new recruiter
If we want to get a clear idea of the monetary costs of hiring badly into your team, it makes sense first to take a look at the monetary costs of hiring any recruiter – whether they’re a good or bad fit.
First of all, consider those all-familiar costs of acquiring candidates during the recruitment process – for example, posting on job boards, LinkedIn, and the time it takes your team to facilitate this. Then, you have your recruiter salary to think of, plus any direct on-costs such as pension contribution, national insurance and holiday pay. On top of this, you also have your recruiter’s monthly sales expenses that they’ll incur as part of doing their job.
This can roughly be broken down into the following:
Recruiter base salary: £35,000 per year
15% direct on-costs: £5,000 per year
Cost of acquiring / Sourcing candidates: £15,000
Cost of sales: £35,000
So before a recruiter even begins to make you any money, each new hire is costing you around £90,000 per annum. Would you risk a bad hire if you knew it was going to cost you £90,000 a pop?
So now you can see what the costs are for hiring even a great recruiter onto your team – imagine what it’s doing to your company income when you hire a bad recruiter!
And if that’s not enough, there are also the indirect costs to consider too…
The indirect costs of hiring a bad recruiter
1. Lost productivity
We all know a new hire will take time to get up to speed with your processes (an average of 28 weeks, apparently!). But research has shown that productivity loss involved in training someone new will cost a business as much as £25,000 per new hire. Then, you also need to take into account the time taken away from the rest of your team in helping to train a new starter.
If you hire someone into your business who isn’t absorbing their training properly, continues to practice bad recruitment habits and is constantly asking the same questions over and over again – this loss in productivity will certainly add up.
2. Drop in staff morale
If you’ve hired a bad recruiter, it’s likely your team will feel it before you do. They’ll be picking up the extra work that your new hire isn’t coping with, as well as performing any necessary damage control with candidates or clients who they’ve rubbed-up the wrong way. Therefore having to take time out of their own (extremely busy!) schedule to carry this person along, so the business doesn’t suffer.
This can result in a major dip in company morale, and your team might even begin to resent you for making a bad decision and making their job more difficult! Also, if your new hire isn’t taking their job seriously enough and is frequently absent from the office, you’re hard-working team will be wondering why this person is being paid to stay at home, while they clean up the trail of destruction that person has left behind.
3. Damage to your business
Hiring a recruiter who is bad at their job can have a serious effect on your reputation as a business. If there’s a drop in your great standard of service, relationships that you’ve been working hard on for months (or even years!) can be dismantled in an instant; all it takes is one bad conversation or decision from a recruiter. A company will often be judged on their hiring decisions, so if you choose unwisely, this will reflect badly on you.
The key message here is not to rush into hiring decisions just because new business is streaming in and you’ve not enough manpower to sustain it. Taking the time and care to grow in a way that’s sustainable for your business will be a lot more productive in the long run.
CEO & Founder of Firefish Software – A CRM and ATS Recruitment Software for recruitment agencies. Helping recruiters attract, engage & increase placements by 25% per annum.