9 Costs of Hiring Mediocrity |
by Dr. John
Sullivan former Professor of Human Resource Management College of Business, San Francisco State University |
No one hires mediocre employees purposely.
But they are hired.
Mediocre employees stem from poor recruitment methods and cost you in 9 ways:
1. Your Management Time And Effort:
- Mediocre employees are "high maintenance", soaking up management time and attention.
- Time spent on mediocre employees can't be spent on better employees.
- Hiring mediocre people as managers and team leaders has a multiplier effect on others.
2. Your Training Time And Costs:
- Mediocre employees require remedial training because they lack competency.
- Mediocre employees are even less productive during their training.
3. Your Customer Satisfaction And Error Rates:
- Mediocre employees send a message to your customers about your service and standards.
- Mediocre employees make more errors and lose you sales and customers.
4. Your Product Development:
- Mediocre employees generate mediocre ideas that distract and detract from your vision.
- Their mediocre ideas can drastically reduce your products Time To Market.
5. Your Competitive Advantage:
- When you hire a mediocre employee, your competitor cannot. That’s your loss.
- It’s an opportunity cost when mediocre employees fill spots that could be filled by a stars.
- Mediocre employees send a message to your markets that you are getting weak and slack.
- Mediocre employees produce less per dollar of salary. Typically 60% of all corporate budgets go to employee expenses, so inefficient use of these funds is a major failing.
- Eventually, hiring mediocre executives and managers adversely affects your stock price.
6. Your Other Employee's Productivity:
- Superior employees eventually resent having to ‘carry’ mediocre employees.
- Team productivity suffers due to time lost helping the mediocre employees.
7. Your Image And PR:
- Mediocre employees send a message to potential candidates that you are not selective.
- Mediocre employees signal current employees that your standards are declining.
- High turnover due to mediocre hires sends a message to the labour market: beware!
8. Your Out Of Pocket Expenses Increase:
- Mediocre employees cost the same in salary and benefits as superior employees but their Return On Investment is much lower. (Eg, revenue generated by superior employees exceeds 5 times their salary).
9. Your HR Time And Image:
- Firing costs (eg, paperwork associated with disciplinary measures, termination, legalities, etc.) and replacement costs (eg, recruiting) increase with mediocre employees.
- Mediocre hires diminish the HR department’s image within the company. Trust is lost.
Solution:
Mediocre employees cost you a bundle; superior employees generate profits. So preventing and overcoming mediocrity is crucial to your ongoing success. Our ExecSearch Enhanced Performance Methodology© does exactly this on-site, at work, in real-time. Ask us how. It’s easier than you think.
For more information contact: Duff Watkins (dw@execsearch.com.au)