The True Cost of a Bad Hire
The True Cost of a Bad Hire infographic from Executives Online in the UK puts into perspective the £4.13 billion a year that UK businesses are losing from a bad hire. With one £50 note being less than 1 mm thick, the stack would reach about 933 meters tall. London’s Big Ben is 96 meters tall.
People are a businesses most valuable resource. Actively finding and attracting top talent is a never-ending task for any company that aspires to be the best.
The amount of new hires that don’t work out is frightening – in fact a study by leadership IQ across a range of industries and job roles found that up to 48% of new hires fail within 18 months. It’s a problem that’s estimated to cost UK businesses over £4 billion a year.
So What’s The True Cost When One Of These New Hires Doesn’t Work Out?
Outside of the obvious salary cost, there are a significant number of tangible and intangible factors that can drive the cost of a failed hire much higher than initially estimated.
We used an example of a £100k per annum executive to answer one question: “What’s the true cost of a bad executive hire?” We factored in salary, benefits, the cost of the recruitment and sourcing process, and the knock on effects of having a poor performing individual in a role for up to a year.
Using data from a range of external sources and our own databases we arrived at a final figure showing this cost to be around three and a half times more than a year’s salary. To demonstrate the scale of this cost we laid it all out in a infographic as well as breaking down how that cost was arrived at.
So Why Do Bad Hires Happen?
Part of this failure to make successful hires is down to company policies focussing on hiring cost rather than ROI.
As Steve Jobs put it: “A small team of A+ players can run circles around a giant team of B and C payers… I’ve noticed that the dynamic range between what an average person could accomplish and what the best person could accomplish was 50 or 100 to 1”.
Next time you’re making an executive hire, remember what it will cost if it doesn’t work out!
It’s a long/tall infographic design, but I think that the length is actually part of the visual story in this case.
Visually, the grids would be easier for readers to understand if the rows were 10 icons across instead of 20. We live in a Base-10 society. Rows of only 10 would make the infographic twice as long, but an alternative would be to add some spacing to visually separate the left 10 from the right 10. Same thought for vertical spacing. It would help to have a gap in the icon grids every 10 rows.
The confusing part is that every icon is a £50 note, so with 20 icons, each row represents an even £1,000. That’s why I think they designed the rows to be 20 icons across.
Odd that they published the infographic as a transparent PNG file.
Thanks to Alex for sending in the link!