One of my favorite idioms is “think per pound not per penny.” In my previous post (https://liuangel.wordpress.com/2015/06/04/outsourcing-your-companys-recruiting/) I talk about the hidden costs of not investing in outsourcing services outside of one’s specialty. Today, judicious outsourcing is arguably a responsibility to uphold.
The majority of us adhere to a risk-minimalist investment approach: diversifying financial portfolios, bundling up investments, conferring with legal team, etc. And, yet, in the recruiting and hiring arena, we often end up the high-stakes roulette player– not realizing the bet we are making against ourselves and what we are putting up as our giveaway items in the event of a likely loss.
Dry statistics (10% to 250% monetary losses):
- The cost of replacing employee is going to cost you two and one-half times the person’s salary. That means a poor hiring decision for a candidate earning $100,000 per year could cost, on average, $250,000, and that expense comes right off the bottom line. (“Five Tips for Hiring the Right Candidate” by Fred Yager”)
- More conservative figures: “U.S. Department of Labor currently estimates that the average cost of a bad hiring decision can equal 30% of the individual’s first-year potential earnings. (https://www.linkedin.com/pulse/20130716151946-2967511-the-high-costs-of-a-bad-hire-and-how-to-avoid-them Ryan Holmes, CEO of Hootsuite)
- In a ‘CareerBuilder study, 95% of surveyed employers stated that a bad hire negatively impacted workplace morale.’ ( http://quickbooks.intuit.com/r/hiring-and-recruiting/the-true-costs-of-a-bad-hire by Megan Sullivan)
- Employers polled stated that a bad hire forces supervisors to spend 17% more time overseeing the employee’s work… (http://quickbooks.intuit.com/r/hiring-and-recruiting/the-true-costs-of-a-bad-hire by Megan Sullivan)
- 18% said the bad hire negatively impacted client relationships. And 10% said the bad hire caused a decrease in sales. (http://resources.dice.com/report/the-cost-of-bad-hiring-decisions/ “Decisions” by Greg Rokos)
- The Harvard Business Review points out that as much as 80% of employee turnover is due to bad hiring decisions. (“Five Tips for Hiring the Right Candidate” by Fred Yager”)
- Take 1 minute to Google “cost of bad hire” calculators. You’ll find quite a few options that funnel out into cost sub-categories such as time/$ spent on ad placements, sourcing, interviewing, onboarding, offboarding, training, HR-admin resources– stuff you may or may not have thought about in the cost-scheme of things but that all aggregate into a rearing lion’s head type of number.
You are Superman in technical project delivery, or cloud architecture, or whatever. But you are human, and your superhero value-add does not extend to every area of your work or life. You are a human hero at best– not a God. The cost of trying to do everything is…everything, if not close to everything. Just look at the numbers.
(If short on time or attention span, skip to 3:27 and stop at 5:00.)
“The more different we are from each other, the more we benefit from trading with each other…Do you know what you are comparatively good at? What you get paid for at your job tells you that. Comparative advantage is the main force driving us to use our talents in those jobs that we do best…Specialization plays a key role in the move from poverty to prosperity. “