09 Aug

Why You Can’t Afford to Hire the Wrong Employee

Another great article here.

Direct costs include:

  • Separation costs — exit interviews, severance pay, higher unemployment taxes
  • Temporary staffing — overtime pay for other employees to perform the former employee’s duties, or the cost of hiring someone from a temporary staffing agency
  • Replacement spending — advertising, agency and search fees, drug testing and background checks, employment testing, travel and relocation costs
  • Training — orientation, certifications, on-the-job training, uniforms

Indirect costs include:

  • Lost productivity — the departing employee spends his or her last days performing poorly or completing exit interviews, etc.
  • Reduced work quality — the new employee must learn the job
  • Lost clients — a result of customer service gaps
  • Reduced morale — the change’s impact on remaining employees
  • Loss of institutional knowledge