September 16/23, 2019: Volume 35, Issue 7
By Tom Jennings
Much has been written and discussed regarding the costs associated with making a bad hire. We have all experienced them. There are costs incurred before the hire is ever made. Job placement services, if utilized, carry a fee. So, too, does advertising the position available. Overtime expenses may be incurred as existing staff have to cover the duties of those not present. The cumulative hours spent interviewing and reviewing the various candidates are hours not spent productively cultivating both new and existing clients. These costs alone can be substantial–and the new recruit hasn’t even started work yet.
When they do report for duty, the real costs begin. There are costs related to having office personnel simply process the various forms pertaining to employment. Logo wear or uniforms may need to be ordered. There may be business cards to be printed or cell phones to be distributed. There is always the intangible loss of productivity as your existing staff takes time to “show the new person around.” This is the polite term for sizing them up and making sure they properly understand the “pecking order around here.” All this and not one order has been written, nor has one item been shipped.
Next come the costs related to properly training the new kid on the block (or worse, the higher costs of not training them well). No one knows how many dollars and how much goodwill is lost as new staff inevitably lose potential sales due to inexperience. While estimates vary according to position and location, all indicate these costs routinely run into the tens of thousands of dollars per new hire.
There is also no disagreement that some turnover is inevitable. Even the best employees retire, relocate, etc. And, as any business strives to improve, it is often necessary to replace a mediocre performer with a better one. Now, imagine how much better the quality of your business life would be if you could substantially reduce these burdens. Not only would your balance sheet profit, but the general tone and attitude you endure every day would improve as well.
My question is this: Was this recruitment necessary? Might the previous employee still be on staff if the general tone of the operation had been one that built trust and loyalty? Were they treated like an individual or merely as a number?
Loyal employees speak positively of your firm to those they encounter. They take fewer sick days, have fewer accidents and file fewer claims. They are more willing to put in the extra hours to complete a “crisis project” for your customers. And while they must be compensated fairly, their attitude is often affected more by the way they are treated than by the manner in which they are paid.
No, the previous statement is not a misprint. Just as price can be made less relevant in the customer’s eyes by a well-presented sales presentation, the exact pay scale offered can be made less critical in the eyes of a well- trained and respected employee. Whether one is selling or paying for services, price range is important but the exact numbers need not be.
I realize this may seem as if I’m stating the obvious, but you’d be amazed at the number of employees I come in contact with who are not getting the level of appreciation and support they desire. Couldn’t happen at my store, right? Don’t be so sure. Just remember, it typically costs a great deal more to recruit new staff members than it does to keep current ones content.
Tom Jennings is vice president of professional development for the World Floor Covering Association (WFCA). Jennings, a former retailer and sales training guru, has served in various capacities within the WFCA.