The REAL cost of making a bad hiring decision....

Business Pilot...
Behaviour & Attitude Style Assessment.

The REAL cost of a making a bad hire…..

Let's assume you hire a mid-level manager, annual salary $60,000 plus benefits+++
After 6 months it becomes obvious that the new hire is not going to be satisfactory…and you decide to terminate. What was the REAL cost of this unsuccessful hire?

Recruitment costs

Advertising in local newspaper $1000
Management time to interview: 6hrs x $150 $900
Checking references, due diligence, @ $100/hr. $150

After hire costs:
Orientation. Management time 8hrs @ $100. $ 800

Direct costs of hire:
6 months at $5000/mth. salary $30,000

6 months benefits 4% salary $1200

Termination costs:
1 months salary/benefits. $5200

Total cost of hire: $39,250

Assume profits at 8% of sales, loss of profitable sales for this failed hire is:

$490,625 !!!

ADD: cost of recruitment of replacement,
ADD: retraining expenses….
ADD: loss of productivity……. Etc., etc.,