You can’t run a business without having staff. Imagine walking into your local café, going to order an Americano, only to find there’s no baristas. Or perhaps going to watch a football game, waiting for kick- off to start, and finding out that neither of the teams’ managers have hired any players. So, while the recruitment process is vital, it is also extremely risky.
While having employees is an obvious necessity, choosing the right person is equally as imperative. The average cost per hire via the use of a recruitment agency can range between £4,000 – £10,000, so if it eventually becomes apparent that the newest hire was not such a good one, and that your newest employee may need to be replaced, you’re already looking at doubling those already eye-watering expenses. Here are some of the risks to be aware of when hiring new staff.
- Are They Going to Stay?
After writing a £10,000 cheque to a recruitment agency, you’re probably going to want the person they found to stay a bit longer than just the weekend. Although some recruitment agencies do offer a thin rebate period; the threshold for receiving any compensation is minute. A rebate period is what agencies offer employers if their newly hired staff were to leave within a fixed amount of time. So, for example; if a person they recruited for you leaves the company within a month of starting, you’d receive compensation of up to 15% of your recruitment cost. If the person leaves within three months of their hire, that compensation drops to a measly 5%, resulting in a repayment of only £200, and someone leaves after three months and a day; that number drops to an even more hurtful £0. Not to forget the £10,000 you’ll have to put together to replace that person.
2. Company Culture
Another question you need to ask yourself while looking for new staff is what your company ethos is; and whether the person you’re interviewing will comply with that morale. A person could be great at their new role but simultaneously ruining the company atmosphere. This may result in unnecessary drama and arguments in the office, eventually leading to withered staff relationships and a reduced standard and quality of staff performance. This will obviously have a negative effect on the progression and success of the company. One study investigating the economical costs of a bad staff hire at mid-manager level on a salary of £42,000 concluded that the overall cash loss can total to £132,000. £29,160 of that was accounted by the “lost productivity of the team.” So hiring someone who fit’s in is crucial.
3. Time and money
Some companies choose to source their staff without the aid of external resources. Although the DIY method will usually save you a few pennies; this is not the case within the recruitment industry. Firstly, the company themselves will be responsible for creating job adverts and sourcing their own candidates; which will take a lot of staff time and company resources. This can be very distracting the staff members dealing with the recruitment of new staff sand also extremely detrimental to the quality of their other tasks. Therefore, we personally wouldn’t recommend Taking on board the heavy task of hunting down your own candidates.
So, these are three major contributors to the overall risky business of the recruitment process. We would suggest the use of fixed priced recruitment platforms that take care of the entire recruitment process; from creating the advert to shortlisting the best candidates, whilst cutting down the overall recruitment price by 75%. This will leave your company with a lot more time on their hands and much healthier HR expenditures.