The Biggest Cost: Variation in New Hire Performance
The biggest cost an organization can incur in hiring is getting a poor performer. Hiring a person is not like buying a physical asset (like a PC) because the variability in new hire performance is so much greater. You may calculate that a Dell notebook will have a lower total cost of ownership than an HP notebook or vice versa; but you won 't go far wrong with either brand. The same can 't be said for hiring. It 's easy to go very wrong with a hire and the costs of making a sub-optimal choice dwarf all the other cash costs involved in recruiting.
The obvious wrong hire is …show more content…
the newspaper ad, the job board ad, the cost to attend a job fair) or agency fees (if you use a search firm). From an accounting point of view what is nice about these costs is that they are easy to track but they difficult to define in term of receiving value for money spent. Value here should be defined by a great quality of candidate response not a great quantity of responses. Would you rather attract five candidates with the skills, knowledge and behaviours to be a top performer than 50 candidates who are far from qualified? Time spent implementing a poor process to attract poor quality is a wasteful and costly burden on your recruiting staff and is