What is the Cost of Hiring the WRONG Candidate?

Hiring is one of the hardest things companies have to do. If they have a recruiter like you, they can skip some of the hassles, such as sifting through hundreds of resumes. But in the end, the hiring decision is still theirs. How can they tell from an interview or two (or more) if someone is going to perform, has the skills they claim to have, and will be a cultural fit for the organization? What if they hire the wrong person?

The truth is, many times they end up regretting their hiring decision. So what is the cost of hiring the WRONG person?

Hiring the wrong person = regret

Well, there are the obvious financial costs. These include the recruiting fees, the cost of any ads they may have posted, relocation costs, drug and background screening costs, benefits contributions, and the payroll taxes paid by the company while the person was employed.

For clients who want to calculate the actual dollar amount of these and other tangible costs, the Center for Economic and Policy Research, a non-profit organization in Washington, DC, has created a Turnover Calculator.

But there are many other, less obvious costs of hiring the wrong person, of which your clients may NOT be aware. They include the following:

  • Time spent interviewing the candidate and checking references
  • Time spent by the manager and other employees on training
  • More time spent by HR on paperwork, benefits administration, and orientation
  • Even MORE time spent by payroll to set up the new employee
  • Loss of clients due to poor customer service
  • Loss of employee morale if others have to pick up the slack for the under-performing hire

The contract-to-direct hire solution!

Most companies do their due diligence with multiple interviews, background checks, and reference checks. So what else can they do to avoid hiring the wrong person? One option is to hire employees on a contract-to-direct basis. That way, they can evaluate the candidate risk-free while he/she is performing the actual job.

You can help by providing candidates on a contract-to-direct basis. Then you can outsource their employment to a recruitment back-office.

The back-office will handle background checks and drug screenings. They will also handle all of the employee paperwork and administration during the trial period. They even offer the candidate benefits during the trial period. Not only that, but they will also be responsible for the payroll taxes during that time.

Best of all, if a company determines that someone isn’t working out, they won’t feel like they have to stick it out with the contract employee and continue to pour more time and money into trying to develop them. They can simply end the individual’s contract and try someone else!

Are YOU in need of contract staffing solutions or contract placement services?

Then download our Quick-Start Guide to Contract Staffing. Or request a demo with one of our contract staffing specialists.

We encourage you to see for yourself how easy it is. And we will be here to help you every step of the way. That’s why you can can also call us at (888) 627-3678.

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