Most managers understand that a bad lab hire comes with a cost. However, many company leaders aren’t exactly sure what that cost is. Some studies say that it’s 30 percent of the bad hire’s first-year salary while others state that it’s 100 percent or more. Plus, it can be hard to identify metrics that can give you a solid answer. As a result, there can be a lot of confusion about how much you actually lose.
Luckily, there are calculations that can help you see exactly how much a bad lab hire costs your business. If you’re struggling to find the right metrics, here are a few to use.
Time You Spend on Hiring Activities
Once you know you need to hire a new lab employee, you may spend days, weeks, or months navigating the hiring process. You’ll need to advertise the vacancy, review resumes, screen candidates, conduct interviews, and handling new hire onboarding. That’s a lot of work.
When the new hire doesn’t work out, that’s time wasted. As a result, it’s a cost you need to factor into the equation. Consider all of the employees who spend time on the hiring process, estimating the number of hours they spent. Then, multiply those hours by the employee’s hourly rate. Finally, add everyone’s totals together to see how much the hiring activities cost your company.
Revenue Losses from the Bad Hire
Adding a less-than-stellar employee to a team means you are missing out on revenue. While there’s always a small loss as the new hire gets acclimated to their role, a bad hire never measures up. As a result, they aren’t as productive, and that costs the company money.
Plus, the bad hire may drag down the entire team. This augments the revenue losses the employee causes directly, making a bad situation worse.
Usually, you can learn about this expense by monitoring revenue per employee metrics. This will give you an indication of how the new hire is impacting profitability, allowing you to factor that into the cost of making a bad hire.
Recruitment Marketing Costs
One of the more obvious expenses that needs to be a part of your analysis is recruitment marketing costs. This includes the amount you spend on advertising the position, such as the price for being listed on a particular job board.
Since a bad lab hire usually means you have to start the recruitment process over again, you lost the initial investment. That makes it a cost of a bad hire that needs to be in your calculations.
Ultimately, a single bad hire is usually incredibly expensive, often more so than companies realize. That’s why making smart hiring decisions is so critical. Not only does it ensure you end up with the best employee possible, but it also saves you money in the long-run.
Find the Best Lab Candidates with Bayside Solutions
If you are looking for top-quality lab candidates, the team at Bayside Solutions can help. Contact us to learn more about our offerings and see how our hiring services can benefit you.