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The True Cost of A Bad Hire – And How You Can Avoid It


It looks like an innocuous number – but it’s very, very scary. In fact, it could be costing you hundreds of thousands of dollars per year. It is estimated that the cost of replacing an employee who isn’t performing can be up to 3 times their annual salary.

But these costs can be avoided, the most successful companies understand that by automating hiring process and screening employees based on key workplace performance competencies like cognitive ability and personality they can find a better quality of hire. This science is called competency based assessment and its making hiring the best employees easier than ever.

Here’s 3 ways in which your bad hires are costing you, and how you can avoid them.

  • Recruiting: Estimates of the cost of recruitment vary, but once you’ve taken into account the cost of advertising for the job and recruiter time, the data shows that recruitment typically costs between 15%-30% of the new hirees salary. Typically, much of this cost is the arduous screening of CV’s and time consuming interviews which can quickly eat up a recruiters hours. However, implementing automated screening based on job aptitude has been shown to reduce the initial applicant pool by up to 90%, so recruiters can spend their time getting to know the employees that have proven potential.quote
  • Training: Training is one of the costliest activities of hiring, the cost of training is two-fold – not only do you have to pay the salary of the new employee, and you also have to incur the expense of a highly experienced employee imparting their knowledge. This is where competency based pre-screening is perhaps most successful. A higher performing employee will have both the drive and the ability to learn faster than their peers – so you have to spend less time training them.
  • Productivity: According to the research, it takes an average of 5 months for an employee to reach full productivity. During the first month or so, employees will function at about 25% productivity, and this will gradually increase throughout the following months. This means that in the first year of employment, an average employee will only earn about 80% of their salary in terms of productivity. In practical terms, if you’re paying a new manager $100,000 and have to let them go after 6 months, you’ll have incurred more than a $25,000 dollar loss from lost productivity alone. Competency based pre-screening assessments is proven to help you find the star performers, who will reach their full potential faster, so you don’t have to deal with lost productivity.

No one has ever said recruitment is easy – but it can be made easier. Talegent has released our brand new Empower platform which allows you to harness the power of competency based pre-screening more easily than ever. Empower is easy-to-use, has no contracts or minimum usage volume, and you can pay by credit card as you go. Register for Empower today, and you’ll be able to test up to 10 people absolutely free.


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