365Jobs.co.uk’s Founder, Rob Greenhalgh knows only too well!

“In my previous life as a project manager, I’ve seen the cost of a bad hire first hand.  Not only is there a direct financial cost to the business, whether the bad hire is a permanent employee or a contractor, there’s a wider impact.  My experience of this was at a large corporate where, although the financial cost was significant, it was relatively easily absorbed by a company with thousands of global employees.  For an SME though, the results of a bad hire can be catastrophic.”

Why a bad hire can be catastrophic for an SME

It’s not just the obvious costs like salary or recruiter fees that hurt.  The real damage often lies in the things you can’t see on a profit & loss account, or a balance sheet.  Lost productivity, declining team morale and a massive disruption to your company culture.

A bad hire doesn’t just underperform, they can derail any momentum, drain time from your leadership team and ultimately slow down growth.  In a small business, where the role of each person is crucial, not hiring the right person can quite literally destroy a business.

What Does a Bad Hire Really Cost?

According to the CIPD, the recruitment and onboarding of a new employee typically costs around £3,000 to £5,000.  That’s a significant investment for a SME either way and if you get a great person, then it’s certainly money well spent!   However, if the hire doesn’t work out, the true cost is far higher.  The Recruitment & Employment Confederation (REC) has estimated that a poor hire at a mid-management level, assuming a salary of £42,000, could cost a business over £132,000 once you factor in lost output, training and rehiring costs.

For a large corporation, this can be painful but for an SME, it can be devastating… and it’s not just about the money.  A bad personality or cultural fit can disrupt a team that was previously working well, or in the case of a small business, the whole thing!  Where there’s a lack of capability, it can force colleagues to pick up the slack or repeat training over and over again, reducing morale and wasting valuable time and in smaller businesses, the owner will be one of those being impacted!

Why the Screening Process Matters

Hiring mistakes often happen when businesses are under pressure, trying to fill a gap quickly, respond to a new contract or replacing someone who left unexpectedly.  That urgency can sometimes lead to corners being cut in the screening process:

• CVs get skimmed instead of reviewed properly
• Interviews preparation is incomplete and no standard format is followed
• Reference checking is skipped because the person “seems alright”

Before you know it, the offer’s gone out and it’s done!  The cost of hiring someone who simply isn’t right for the role, for your values or for your team is far greater than the cost of waiting a few more weeks to get it right… however, what if you DO need to move quickly?

Take Control of what’s Controllable

Let’s face it, you can’t control everything in the recruitment process… sometimes, the demands of your business means that you need to move fast to get someone in the door!  Whilst that’s not ideal, you can save yourself a lot of time and reduce the risk of a bad hire by implementing a recruitment system that automates as much of the process as possible.

For SME’s though, that isn’t always justifiable from a cost perspective, given the frequency that they recruit so maybe an agency is the best thing?  Again though, that can be expensive!  If you’re hiring 4 people a year through an agency at £5k a time (based on a rough 20% of an entry level salary), that’s £20k!!

From an automation perspective then, what can you do?  You’ll always want to meet and interview any candidate you’re seriously considering and get a feel for whether they’re a good fit or not.  Whilst there is technology out there that can automate the interview process, it can’t replace your instinct as a business owner/leader so it’s not something you can automate… so what how can you take control?

Automation through 365Jobs.co.uk

This type of scenario is exactly why 365Jobs.co.uk exists!  For a fixed fee of just £349, you can advertise your vacancy on the UK’s top job sites and get all candidates back into an ATS.  No subscription required, no big implementation of a system, just a one-off fee per job.  Drag and drop candidates through the process, ensuring they receive real time updates and even message them directly through the platform if you want to!

If you select our SmartScreen product, which is just an additional £50 per job, each CV received from every job board is automatically scanned and compared against the job description you’ve posted, and given a % ‘match’ score, along with detailed commentary as to why the score was given.  Set your preferred match rate, and each candidate CV that scores your chosen rate, or above, is automatically shortlisted!

You can’t control everything in the recruitment process, but you can make it a lot easier and cheaper through automating the ‘job advert > shortlisting’ process, and 365Jobs.co.uk can do that for you!

Final Thoughts

The wrong hire can cost you more than money.  For SMEs with limited time, budget and bandwidth, it’s a risk that needs to be taken seriously.  The good news?  There are solutions out there to help you balance the individual financial & time constraints of your business, with an efficient & successful hiring process!