We can all excuse someone for trying to be frugal when it comes to recruitment, but would they take the same approach if they knew what it could cost to hire the wrong person?
The common misconception about using an RPO or a recruitment agency is that it is unnecessarily expensive and that by paying a fraction of the price to post an advert on a job board you can get the same results. This could not be further from the truth.
HR Review estimates that the average cost of replacing an accountant is £40k.
Surprisingly high? More than 60% of this due to the length of time it takes for a new employee to adapt and reach their optimum productivity. The other 40% is comprised of logistical costs: agency fees (for the interim during the vacancy and the permanent hire), the cost of time spent by higher management interviewing candidates, and HR department time processing new starter.
In the long term, if this candidate goes on to make a contribution to the productivity/efficiency/profitability/success of the organisation, this is a great investment! But what if you didn't get it quite right?
A Harris Interactive survey discovered that 62% of UK businesses had experienced a bad hire in the last year.
This "bad hire" also has a knock on effect on other business components. 23% reported a decline in productivity, 22% found it negatively affected morale, while 16% said it had a negative impact on customer relations and 12% claimed sales suffered. The monetary value of these impacts can be astronomical, not to mention the addition of costs to re-recruit. 27% of UK companies say a bad hiring decision cost them over £50,000. This is additional to the original recruiting cost!
I suppose you can never be sure that someone is 100% "right". But with a narrow view of the market means your scope for choice of candidate is severely reduced, and picking the best of a bad bunch is hardly what you want to do. Take your time, pick a recruitment partner that is going to listen to your feedback, take a temp so you don't feel like you're so pressed for time you need to pick from the first few people you see, get the each candidate's feedback from your recruiter, get someone you trust to meet the top 3 candidates and see what they think and discuss! All these things bring you closer to being sure and reduce your chances of spending thousands £££'s unnecessarily.
The moral of the story is; don't hesitate to invest time and money into your new hire, it's the economic choice in the end.