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The High Costs of a Bad Hire

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Did you ever wonder about the repercussions suffered by your business when a presumably good hire goes south? A recent study done by CareerBuilder indicated that almost 70% of employers reported that bad hires cost them between $25,000 an $50,000.

Translated to retail where sales staff are concerned, an employee who makes an inappropriate comment or behaves unprofessionally, like saying aloud to a fellow sales associate, “I greeted the customer first” or talking about whose commission it is (in front of the customer), can create visibly uncomfortable situations and result in a customer’s departure without making a sale.

Bad hires waste the resources—money and time spent recruiting and interviewing—especially when advertising costs are incurred and valuable time is spent on the interview process. Then there are the salaries paid out and lost during the time the poorly performing employee was working; the decrease in productivity by the lost employee; the possibility of him or her causing the store to lose sales and customers; the costs and time spent training the employee.

Other adverse effects manifest themselves when a “bad apple” spoils a positive work environment by lowering co-workers’ morale and productivity; having to pay unemployment compensation; then additional hiring and training fees which are repeated with a new employee comes in to replace the bad hire.

The CareerBuilder survey also found a number of reasons that bad hires are employed:

* Businesses need to hire someone quickly and don’t devote enough time and research to handling it properly;

* Poorly staffed HR departments;

* Information about the prospective employee is insufficient;

* A bad recruiting system and not understanding where the talent pool is or how to direct their search;

* Failure to check references and background.

* Sometimes, it’s just chalked up to bad luck and making a mistake.

If you’re desperate and need a replacement quickly, that alone should be a warning sign—haste rarely guarantees you’ll find someone better. And when you haven’t done the necessary legwork, it may not ensure you won’t be hiring the same type of person as a replacement.

So where does that leave a retailer who needs to hire extra staff during a holiday season or bolster their core staff with quality people?

While you may think that because so many people are looking for work, finding quality staff will be easy, letting a Retail Recruiting Firm do your hiring can not only save money, but can make you money down the road.

Outsourcing your hiring needs can allow you to allocate your time and resources more efficiently. Firms specializing in retail employment can find better-qualified full-time, part-time and management candidates from a more targeted pool, and assign an account manager to cater to your store’s specific needs. Finally, their expertise and understanding of a variety of retail environments can end up increasing your retention rates, and your store can spend more time focusing on customer service, building your brand and selling.

TAGS: retail, staffing,
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