By Lou Adler
4 Clues That You’re About to Make a Bad-Hiring Decision
The cost of your company’s bad hiring decisions can be staggering. To calculate this cost, I tell my clients to add the first-year turnover rate to the percentage of people who the company wouldn’t rehire. This number is your company’s Bad Hiring Rate (BHR). Next, I ask them to multiply the BHR with the total increase in payroll for new hires to calculate the cost of bad hiring decisions at your company.
As you’ll see from the example and graphic below, this can be a huge number whether you’re hiring a few people or more than a thousand employees.
For instance, if you hired 100 people this past year and turnover was 10% and there’s another 10% who you wouldn’t rehire, at 20% X 100 X $100,000 in average payroll, this is a wasted $2 million! And that’s not even taking into account the positive impact stronger people would have had or the disruptive impact the bad hires made.
Originally published on business.linkedin.com July 8, 2020