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Study shows hiring the wrong employee can cost you six times his salary!

by , 22 January 2015
A study by The Chartered Institute of Personnel and Development found the cost of hiring the wrong employee can be between four and six times the employee's salary.

That's why it's important to make sure you hire the right candidate every time.

Before we show you how, take a look at the costs you incur when you hire the wrong employee

According to firstcourserecruitment.com, the following costs come with hiring the wrong employee:
  • Recruitment costs.
First, you spend money on your initial recruitment drive. If you end up firing the bad hire, you have to spend money to redo the recruitment process.
  • Training costs.
When the person leaves, the money you spent to train him goes down the drain. And your training costs go up because you must train the new person who'll replace him.
  • Decreased productivity costs
Bad hires might not be productive. And, as you know, when productivity goes down, your company's bottom line suffers.
In addition to these costs, dealing with a bad hire is time consuming. They eat away the time you should be spending on your other employees and your own work.
Now take a look at the tips you must use to avoid hiring the wrong employee…

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Make sure your recruitment process is legal!
  • Did you know there are 11 legal requirements for recruitment?
  • Do you know how the Employment Equity Act affects your job advertisement?
  • Do you know what checks you can legally conduct on an applicant?
  • Are you sure your employment contract includes the 16 clauses the law says you must have?
If you don't have all of these aspects correct, you'll be on the wrong side of the law when it comes to your recruitment process.

Click here to find out how you can ensure your recruitment process is legal so you don't face penalties from the DoL.


Three tips to hire the right candidate every time

To avoid hiring the wrong employee and paying a heavy price later on, get the basics of the recruitment process right. You must:
Tip 1: Plan the interview
Your planning must include reviewing the candidate's CV, as well as structuring the interview in terms of the job specs and KPIs and making sure your interviewing panel has the right skills.
The Labour Law for Managers Loose Leaf Service says 'planning will help you accurately assess candidates' abilities and see if they'll fit your corporate culture.'
Tip 2: Develop an interview questionnaire
With a questionnaire at hand during the interview, it will be easier to see if the applicant is the right person for the job. Develop a questionnaire before your next interview and use it for all potential candidates.
Remember, our labour laws make it clear that you can't ask discriminatory questions during an interview. If you list the questions you'll ask beforehand, you can make sure all your interview questions are legal.
Be sure to check out this article for tips you can use to create an interview questionnaire.
Tip 3: Perform reference checks
To hire the right person for the job, conduct thorough reference checks. This includes doing credit checks, verifying qualifications, checking whether or not the person has a criminal record and so on.
Remember, all your reference checks must be relevant to the requirements of the job.
As you can see, hiring the wrong employee is costly. Don't skimp on the basics when it comes to the recruitment process. Use these three tips to hire the right candidate every time.
PS: To discover four more tips to use, check out Recruitment: The Complete Guide.

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