I made a bad hire. I was a bad hire. I’ve often wondered, “what’s that actually cost?”
Headhunters and staffing groups will warn us often of the cost of an employee that doesn’t make it one year.
This post doesn’t address the momentum loss or the imaginary “chips” that we spend with each leadership decision. I am after some sort of formula that actually could give us a real number to work from.
Using the attached worksheet I’ve run scenarios of churches (although you could do this with your business or non-profit, too) of 500 and 5,000 based on the number of staff and best guesses of salary.
So far, it has always come out as something like salary times ten to twenty percent. Meaning if you made a 40k dollar bad hire you will spend somewhere around 48k in cash. If this person was a 90k hire it will cost about 98k or a bit more.
The worksheet attempts to take into account the days spent by those organizationally above and below the bad hire…in essence the “day rate” of a 4-hour meeting of a team sitting around praying and trying to figure this out. What does it cost to have 5 conversations with board members? What is the cash cost of potentially traumatized downline team members who either are having circular conversations or need a mental health day because of what just happened?
Take a look at the attached excel doc and sharpen up your pencil and let me know if you think this is accurate. I’d love to hear if you think this is close, or perhaps you have a good story to tell about either making a bad hire, or like me, being the bad hire!