The true cost of hiring
The average wrong hire costs an organisation 2.5 times the annual salary of the employee.
As noted below, the difference in performance between an average and a top performer is significant, and larger still if the failed employee was, as is likely, below average. The disruption caused to both team and clients will result in further loss of opportunity and market share.
The average executive search process takes around 4 months, and the time and energy wasted will inevitably lead to a loss of productivity, as will the time spent integrating the failed employee.
Team performance and client relationship will inevitably suffer, as the period surrounding an executive’s departure is often chaotic. The impact on revenue can be significant, and the process will often create a more difficult integration period for the next hire.
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Organisations will often hire more junior team members for their compatibility with senior hires, which is inevitably lost when the executive leaves. The potential of a ill suited employee’s impact on colleagues can also not be underestimated. There is often a general decline in morale, productivity and employee goodwill, and hiring and firing can cause friction and loss of confidence amongst other employees, to the point where other departures follow on.
War For talent
The importance of a sound hiring strategy
Many firms have responded to the current economic climate by attempting to cut down on recruitment costs, but this is a false economy. Attracting the top talent and the best fit for your organisation is arguably more important now than ever. The Harvard Business Review reported that as much as 80% of employee turnover is due to bad hiring decisions, and this begins with the initial process. A sound hiring strategy is in other words of paramount importance.
Developing a solid relationship with a recruiter who truly understands your organisation’s needs can save you considerable time and money in the long run. Many companies fall into the trap of operating large PSL’s with recruiters they have never met and on low rates. But if you are not willing to invest the time and energy in the relationship, why should they? Mandating an expert recruiter is still the best way to ensure you see the best candidates the market has to offer.
About Fram Search
Established in 2010 by Simon Roderick, a recruiter with 20 years City recruitment experience, Fram Search is a specialist financial services recruitment consultancy. We focus on permanent and interim recruitment in the UK & internationally.
We provide high quality contingent and retained recruitment to boutiques and global brands. We have long established relationships and access to deep talent pools. Fram takes a highly consultative approach, and we have a quality over quantity ethos. We are proud that our contingent fill rate is nearly three the industry average and we augment our retained search methodology with rigorous psychometric testing. Champions of diversity & inclusion, all staff have undertaken unconscious bias training.
Please contact us on 01525 864 372 / email@example.com to learn more.
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