I was having a discussion with one of my clients this week about how critical it is to get the hire correct. There are many different studies that try to estimate the true cost with most of them coming in around 2 times their salary. So if you hire a $100,000 candidate it could come out to be a $200,000 problem.
Let’s take a look at it from the point of a sales executive. I don’t care if it’s top leadership or even a direct sales person. Besides salary and other hard costs that you think are wastes, you have other intangible costs. In a revenue producing role like sales or sales management, look at the cost of missed revenue opportunity by not doing the job properly. Also, how will your customers view this poor hire? Don’ forget this will be a direct reflection of your company and the kind of people you employ. These hires can also have a direct impact on co-workers and their production. Now assume you throw in the towel and successfully find a way to get rid of this miss-hire. Your recruiting costs will start again, the position will be vacant, new introductions will need to be had, time invested to “get up to speed,” and also the perception that you may not have a handle of what is going on (to your customers and employees).
Everyone knows hiring is critical, but when you consider the cost of using a top recruiting service (usually around 25 to 30% of first year salary), that can be money well spent.