Organisational Insights

The Hidden High Costs of Poor Recruitment Practices

Recruitment may not be rocket science, but there is a definite art to it and developing the ‘artfulness’ takes dedicated experience to craft.

Much like a talented engineer does not necessarily make a good manager of people, or a gifted teacher of children does not automatically make them an effective educator of adults, likewise with recruiting – not everyone has ‘built-in’ recruitment skills and abilities.

Yet many people in organisations believe because they understand the job that needs to be filled this makes them an expert in the art of recruiting for it effectively.

This is false logic and can lead to disaster with a high price tag attached.

Studies over many years indicate the cost of a poor recruitment decision can be up to three times the annual salary of the role, from anyone’s stance this is a staggeringly high amount of money for an organisation to gamble, yet many do just that.

Research states some of the negative and often hidden effects from poor recruitment practices and decisions include;

• disruption across many levels of the organisation
• focus shift from core competencies to recruitment
• the high cost of management time away from their main role
• morale compromised
• potential for stress-related injuries and claims due to compensatory work levels
• increased risk of legal claims and associated fees
• cost of re-hiring
• cost of re-training
• lost productivity while another recruit settles into the same role

“The cost associated with making a poor hiring decision from a productivity, customer service, and liability perspective have been widely studied and has been estimated to be three times the annual salary of the individual involved.” (Calvasina,, 2008, p 95)

The facts are out there and yet many organisations still believe that they are saving money by not engaging a recruitment expert – perhaps it’s time to rethink this dogma based on diseconomy of scale.

Authored by Cheryl McCormack, Business Solutions Consultant and Expert Recruiter. Cheryl holds qualifications in Human Resources, Management, Psychology and Policy and is an accredited practitioner of Myers-Briggs Type Indicator® and Strong Interest Inventory® instruments. Cheryl can be contacted on 0417899756 for further discussions around services offered.

Calvasina, G. E., Calvasina, R. V., & Calvasina, E. J. (2008). Making More Informed Hiring Decisions: Policy and Practice Issues for Employers, Journal of Legal, Ethical and Regulatory Issues, 11(1), p.95-107.

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