When it comes to running a business, hiring the right talent is everything- It is like fitting pieces of a puzzle together. The right talent completes the picture but the bad hire throws everything off.
Have you ever asked yourself, why it'ssometimes hard to find that missing puzzle piece(s)or why some hiring process drags on for too long?
As a business owner, HR manager or a business leader employing a bad hire is more than just a wasted salary! What most businesses don’t consider are the hidden costs that come with a bad hire. The Society for Human Resources (SHRM) states that turnover caused by bad hires can cost a company up to five times the employee's annual salary when considering factors like recruitment, onboarding, training, and lost productivity. For executive-level positions, the cost of a bad hire can be significantly higher.

In this post, I will be exploring the hidden cost of a bad hire and why Outsourcing to a staffing agency will minimize this hidden cost. Hiring the wrong person doesn’t just affect your team morale or productivity, it hits in ways that are not immediately obvious. Let me break it down for you:

• Productivity: Think about all the time and resources required and spent on recruiting and training a bad hire. When that person isn’t a good fit, the time spent onboarding and training them becomes a retrospective cost, also known as sunk cost. The sad thing is that the rest of the team has to pick up the slack and this stretches the team thin. This loss of productivity doesn’t just stop with the new hire, it often ripples across the entire team. When the focus shifts to correcting mistakes or managing underperformance, your team isn't as efficient, and important projects can fall behind schedule.

• Recruitment Cost: Let’s call a spade a spade, recruitment is hard! You probably have spent time and money on job postings, reviewing applications, interviewing, and onboarding a new employee. Now, if that hire doesn’t work out, you’ll have to repeat the process from scratch and no one wants to do the same thing twice! On average, it costs thousands of Naira to hire someone, and that’s before factoring in the time spent by managers and HR teams. A bad hire means spending that money all over again (doubling the cost).
• Team Morale: This is one aspect that is mostly overlooked. If the new hire isn’t pulling his/her weight, it increases the workload of others. In addition to this, if such a hire has a bad attitude or a toxic personality- other team members become frustrated, disengaged and might possibly start considering leaving the company. The emotional and psychological cost of a bad hire is often underestimated. It can create tension within the team, disrupt the flow of collaboration, make the workplace feel less enjoyable and overall destroy the team’s synergy.
• Missed opportunities: Each time the bad hire comes to work and underperforms means you are missing out on the opportunity to seize the best person for the job which in turn subtly has an effect on the long term growth of your business/ company. The right hire could have brought fresh ideas, solved issues, or driven the company forward in ways that are difficult to quantify but have a substantial impact.
• Financial losses: When you add up all the costs: recruitment expenses, lost productivity, lost opportunities, and potential impact on team morale, the financial hit from a bad hire can be overwhelming. The U.S. Department of Labor estimates that the average cost of a bad hire is 30% of the employee's annual salary. For example, if a bad hire earns $60,000 per year, the company could lose up to $18,000 as a result of that mistake.

Outsourcing to an HR staffing agency like Rovedana will help minimize these hidden costs. Here’s how we help:

• We do our due diligence: We vet the candidates. We go through the time-consuming process of screening, interviewing, and background checks so that you don’t have to. By the time a candidate comes to you, we have already ensured they are a good fit for your role and company culture.
• Industry-Specific Expertise: Whether you need temporary, contract, or permanent staff, we know your industry and the specific skills required. This ensures we match you with the best talent for your business, minimizing the risk of making a costly bad hire.
• Quick Turnaround: Need someone fast but don’t want to compromise on quality? Staffing agencies have access to a wide talent pool, meaning we can fill vacancies quickly without sacrificing the quality of candidates.

At the end of the day, the cost of a bad hire is far greater than the upfront expense of working with an agency. With Rovedana, you’re not just filling a vacancy, you’re making an investment in the future of your business, and trust us, your team will thank you for it.

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