THE HIDDEN COST OF HIRING THAT ‘BAD EGG’
You said your ‘bad egg’ was on a salary of $ and was employed in your business for months.
Gulp! It’s hard to swallow isn’t it?! I’m sure you’re shocked to see the financial impact that one ‘bad egg’ has had on your business. This doesn’t take into account the paid wages you’ve already flushed down the loo. Below we’ve broken down the hidden cost, so you can see exactly what contributes to this figure.
Below we’ve broken down the hidden cost, so you can see exactly what contributes to this figure.
There’s a bunch of job boards out there where you can post adverts but Trademe Jobs and Seek are the most used in the hospo industry. The above cost is an average price listing.
Every business and every job requires different levels and types of training. Inductions, health and safety, on the job training, workshops, apprenticeships and assessments are typical in hospitality. We’ve calculated an average cost for training across the industry.
The average time to fill a job in hospo is 20.7 days. Advertising, screening, scheduling meetings, interviewing, trials, background checks through to contract and onboarding will take you on average 28 – 40 hours. It’s usually Senior Management or Head/Executive Chef managing the recruitment process – so we’ve estimated this cost as 28 hours @ $55/hr.
DON'T WASTE ANY MORE DOUGH
TOOLS / EQUIPMENT $1,000
Most jobs have a range of tools or equipment required by a new employee – these could include uniform, clothing, licences or certificates, knives, machinery, phone or laptop. We have calculated an average cost of required equipment across hospitality roles.
LOST PRODUCT minimum of 3% of their gross pay. IVITY $
This is the mac daddy of the hidden costs. To arrive at this figure we’ve taken the average industry income and productivity, the salary of your bad hire and conservatively factored against things such as opportunity cost, loss of productivity, customer dissatisfaction, bad reviews and the impact a toxic worker can have on team morale and culture.
It’s not just the employee’s weekly wages you need to take into consideration, you’ll also need to factor in things such as Kiwisaver contributions and ACC Levies. It’s compulsory to match employee contributions – so if your new recruit opts in for Kiwisaver you’ll be looking at a minimum of 3% of their gross pay.
Now you’ll need to start the process all over again, investing more time and money to re recruit, so make sure you get it right this time! This cost is based upon re advertising, recruitment, training, and any required tools or equipment.