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Avoiding the Cost of a Bad Hire

Written by

Oz Rashid

Published May 11, 2023

Updated May 19, 2023

Reviewed by

Landon Cortenbach

The Real Cost of Hiring the Right People

Let’s face it: Hiring great people takes a lot more time and money than most management teams anticipate.

With all the soft and hard costs associated with hiring, it’s nothing short of a miracle that organizations can onboard with the breadth and volume witnessed in industries like tech and healthcare over the last several years.

But times are changing. Hiring budgets are shifting. And retaining the very best people is more important than ever.

The average cost per hire for executives is $28,329, according to the Society of Human Resources Management. Another way to look at it: The average cost of a bad hire is at least 30 percent of an individual’s first year of expected earnings.

The cost can be greater depending on the effort a company puts into the recruitment and onboarding stages, not to mention the intangible effects on an organization’s culture, productivity, and reputation.

The question is, how do you avoid racking up costs for bad hires? The short answer: Stop making bad hires. That’s a lot easier said than done, especially when labor shortages make the job market more seductive for talented employees. Last summer, 40 percent of workers were considering quitting their jobs in three to six months, according to a report by McKinsey and Co.

Reducing the Costs of Bad Hiring

As the economy has shifted from the Great Resignation to the Great Rebalancing Act, employers are in a good position to rethink recruitment strategies and ultimately reduce the cost associated with bad hires.

Following are the steps companies can take to ensure they are talking to better candidates and helping employees with more staying power and less drain on resources.

Clearly define job requirements and expectations

We’ve all been there before. You have a vague sense of what you’re supposed to do in a new role, so you tentatively move forward without any specific knowledge of the destination. Same goes for job candidates poking around the careers section of a website, looking at poorly defined openings. If a company cannot clearly articulate a role and expectations, candidates will not align with the over-arching goals of an organization.

Conduct comprehensive interviews

Northwestern University teaches a course to its staff called the ART of Interviewing & Unconscious Bias Hiring based on the premise that “past behavior predicts future behavior.” When conducting interviews, employers should ask candidates to provide specific examples of past experiences that could be useful in the role they are pursuing. This is just one interviewing technique of many that can help hiring managers focus on the candidate’s personal experience, without imposing their own bias on why someone might be a good fit.

Artificial intelligence (AI) and machine-learning (ML) tools are making it a lot easier to understand a candidate’s potential through predicative models. We are developing an AI tool at MSH that helps hiring managers work more efficiently, while increasing the probability of making great hires.

Check references and conduct background checks

Conducting reference and background checks can help verify the candidate’s qualifications, work history, and character. This step can help you avoid potential issues that may not have been revealed during the interview process.

Provide ongoing training and support

Once you’ve hired a candidate, it’s important to provide ongoing training and support to help them succeed in their new role. This can include coaching, mentoring, and professional development opportunities. By investing in your employees, you can help them become more productive and engaged, which can reduce the risk of turnover and the costs associated with hiring and training new employees.

These are just a handful of ways to ensure your organization is hiring and retaining the best and brightest employees. By taking a thoughtful and comprehensive approach to hiring, organizations can increase the likelihood of finding the right candidate and avoiding the costs and headaches of a bad hire.

Additional Resources

Leading High-Performing Teams Course

Why Online Training for Finance Teams Makes Sense

Workforce Development

See all team development resources

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Should You Hire A Career Coach?

A career coach is someone experienced in a specific field, or in the general hiring and recruitment process.

Finding a career coach will depend on the networks and resources you have at your disposal.

Consider the pros and cons of a career coach before hiring one.

This article is for professionals who are considering a career change or finding other ways to progress in their careers.

Are you feeling unfulfilled in your current role? Have you applied to multiple jobs without success? Are you wondering if you are on the right career path? Do you want to switch industries altogether? If you said yes to any of these questions, consider hiring a career coach.

Career coaches are experts in career planning, resume building, interviewing and negotiating. While you may only search for a new gig or switch careers a handful of times in your life, these professionals are in the know of current hiring practices because they’re constantly helping job seekers.

We asked career experts to share everything you should know about career coaches and when you should hire one.

Key Takeaway

If you have spent a long time at a job and are looking for a change, we have outlined how to smoothly transition to a new job mid-career.

What does a career coach do?

At the most basic level, having a career coach is like having a brand awareness team, said Rachel Bitte, founder of RB Consulting.

“These professionals understand how to pinpoint the best aspects of your professional experience and market it in the most attractive way possible to potential employers,” Bitte said. “They’re well versed in crafting resumes, career planning, motivation techniques and, most importantly, network building.”

According to Vicki Salemi, a Monster career expert, job coaches usually have extensive experience in recruiting or human resources.

“They can help you with a variety of tasks,” she said. “For example, with my clients, we look at long-term dream careers, what they currently do and how their next job can lead them closer to their dream job.”

Coaches also give their clients accountability to keep the job seeker on track to move toward their next role, Salemi added.   

When to hire a career coach

Many people assume a career coach is only beneficial after you have submitted dozens of applications and are in desperate need of a job. While this would be a great time to find a coach, it’s not the only time they can provide support.

“Whether you’re just starting out and unsure which path to take, hoping to chase a new passion, or you’re ready to move to the next level, getting an outside perspective from a professional can be extremely helpful,” Bitte added.

Salemi suggests hiring a career coach before you really need one.

“If you’re thinking about leaving your job, but aren’t sure, you may want to hire a career coach,” Salemi said. “It’s important to be proactive. Don’t wait until it feels like you absolutely detest your job and can’t stand going into the office.”

Salemi explained career coaches don’t all provide the same service. Some coaches can help with an upcoming interview, while others specialize in negotiating salary and benefits.

How to find a career coach

The best way to find a career coach is through word of mouth referrals from friends. However, you can also find great coaches on social media sites like LinkedIn.

Tip

Don’t have a LinkedIn profile yet? Learn what LinkedIn is all about and why it can help you.

How To Calculate The Cost Of Call Center Systems

Today’s call center systems offer businesses a wealth of useful features to help answer customers’ calls faster and improve company efficiency. They route incoming callers to the right person quickly and easily as well as manage complicated outbound marketing campaigns. 

With so many different options, choosing the right call center system for your business can be challenging. Below, we break down the different systems, pricing models and features that you’ll factor into your final decision.

Subscription fees

This is where it gets complicated. There are four fee types to factor in: per-desk charges, service charges, outbound calling fees and inbound calling fees.

Per-desk charges

Depending on the agreement you strike up with an on-premises PBX supplier, you can pay a fixed price for your call center system regardless of how many people in your company use it.

Per-desk charges apply mainly to cloud-hosted systems. In our review of the best business call center system software, the monthly charge per employee can be as little as $25 per month.

Service charges

But that’s only the beginning. Joseph Ansanelli, CEO and co-founder of Gladly, shared a rundown of some of the extra fees per user per month for cloud-based call center systems. 

Depending on the services you subscribe to, you might be looking at the following costs in addition to per-desk charges:

A full-service agent help desk or ticketing system often costs about $150 to $300 per seat per month.

Voice integration partner services typically cost $50 to $100 per seat per month.

Channel-specific vendors, such as email and live chat solutions, typically cost $30 to $50 per seat per month.

Customer platforms, such as customer relationship management (CRM) and order management systems, tend to cost about $150 per seat per month.

Features like these are normally controlled by the onboard software within an on-premises PBX, so you don’t have to pay extra for them.

Outbound calling fees

With a cloud-hosted system, you have no choice over who routes your outbound calls; it’s your cloud host. There are generally discounts for higher call volumes.

While it is true that outbound calling plans are often cheaper than regular business landline rates when measured by the minute, you might end up paying more because you’re buying time you don’t use that doesn’t roll over to the following month.

“Some call center subscriptions have monthly subscription plans, like $50 to $100 per month with a minute plan or pay-as-you-go plan,” said Ben Reynolds, CEO and founder of Sure Dividend.

Businesses with on-premises PBX can probably secure better deals by signing up for an unlimited calling plan. These plans allow unlimited outbound calls, usually within certain areas or countries, for a low monthly fee per operator. A handful of cloud-based call center systems now offer this as well, so be sure to compare plans.

Inbound calling fees

While there are no provider charges for inbound calling, there are some costs to consider, according to Ansanelli.

He said that phone calls and emails can cost two to three times more than modern digital channels like live chat, social platforms and self-service. “That’s because modern digital channels are asynchronous. Customers don’t expect you to respond right away, and that allows agents to serve multiple customers concurrently.”

What are the costs of virtual, in-house and outsourced call center services?

Next, you need to consider the costs like staffing in addition to your call center system and its software.

Virtual call center

Jeff Kahne, principal at Firefly Consulting, told us that “Voice over IP (VoIP) is fast, and you don’t have the same problems we used to have with running business phones to a home. You have a little bit of reduction in the cost of the physical plant, but all the human costs, maintenance costs, software and equipment costs.”

When using a virtual call center, your employees don’t need to work in a designated building. Agents can work remotely or answer calls from their homes. This became a much more prevalent trend since the COVID-19 pandemic. The national experiment of working from home has had an effect in that many businesses now offer home or hybrid working, which offers the potential for a drastic reduction in their office-related costs. [Read related article: Does Working From Home Save Companies Money?]

Tip

Modern on-premises PBXs allow for remote working for staff away from the office by using a VOIP-powered hybrid plug-in.

Did You Know?

Go omnichannel as soon as possible by allowing consumers to contact you when they want and on the channel of their choice. Read our review of GoTo Contact Center software to see the types of omnichannel integrations many call center systems now offer.

How do companies reduce call center charges?

These are four main ways to save money with a call center:

1. Reduce call volume and length.

Kahne suggests moving customers to self-service options like your website, automated systems and chatbots to lower call volume and length. However, he added, you should weigh this against customer satisfaction metrics like your Net Promoter Score. You’ll also need to determine how many of your calls you want answered at what speed.

“For example, if you’re currently answering 80 percent of your calls in 30 seconds, one way to cut costs is to go to 80 percent in 40, 50 or 60 seconds,” Kahne said. “That lowers the number of seated agents required for a period of time.”

2. Leverage on-demand staffing.

Tan said that on-demand staffing is the best way to reduce call center costs, because then you’ll pay only for the work performed and issues resolved. The most expensive time intervals to support customers are low-volume hours and when unexpected call volume occurs, according to Tan, because this might make overtime pay necessary.

“When volume is higher than forecasted, the on-demand staffing model allows for an influx of volume to be handled without incurring additional overtime charges or penalties,” Tan added.

3. Properly train your agents.

Thoroughly trained agents are likely to resolve issues more quickly and have fewer repeat calls. If call centers don’t invest in employee training, management would need to hire more people to handle the same tasks, according to Yaniv Masjedi of digital security company Aura.

4. Eliminate duplicate tickets.

Ansanelli said that ticket duplication is a big issue with most ticket-based customer service platforms.

“If a customer sends an email, then follows up with a call about the same issue, that creates two tickets that are fielded by two agents,” he said. “Implementing a customer-based platform eliminates this issue and can reduce inbound volume by 30 percent or more.”

Simone Johnson and Jennifer Post contributed to this article. 

Are You A Good Client…Or A Bad Client?

You may be thinking “Why do I care if I am a good client or not? They don’t have to like me, but they do have to get me results”

That is true – and whether they like you or not should most definitely not impact the results you get (although we all see it, when someone is liked and easy to work with, they tend to get more favors – people are willing to go the extra mile for a grateful/easy client – not saying that’s right or wrong, just saying it’s a fact of life!)

BUT the kind of client you are can actually be a determining factor in your level of success!

Let’s break this all down a little bit…

A good client understands what they are getting and values the services.  If they aren’t clear they ask questions and make it their business to understand what is included and what is reasonable to expect in terms of results.

(Side note to SEO Firms: work with your client on this.  A good SEO firm will work with the client to ensure they understand this and ensure all questions are answered!)

A bad client thinks they are paying you something (whether it’s $5 or $50) and they expect the sun, the moon, all the stars and they want their cake to eat too.

Sure, you should get good value for every dollar you spend – there is no denying that.

BUT you can’t walk into a Ferrari store and say “I can’t really afford a Ferrari, so I am going to pay what I would for a Hyundai, but give me the Ferrari and throw in all the bells and whistles too”  You would be laughed out of the store.

You would never dream of doing that with a car, but it’s amazing how many people expect to name a lowball price and get everything that a higher paying client would get.

So, to be clear – yes, definitely demand value for your money.  Every hard earned dollar you spend should get you something solid in return – but be realistic about what you are getting for what you are paying and take the time to learn what else you could get if you spent just a little more.  You may decide not to spend more but the key here is understanding what you get at different price points and then accepting the results that you should expect for that money paid.

K, now that we covered that one, let’s keep going…

A good client will make themselves available and be willing to be an active participant.  OK, before anyone gets upset, let me explain – yes you are busy, yes you hired an expert to do the work BUT you need to give input, you need to approve work, you need to answer questions.  You know your business better than anyone and although most of the backend work can usually be done without too much of your input – getting your feedback is crucial at the start.  So, no, you don’t need to do the work for the SEO Firm, but yes, you need to make yourself available to support their efforts.

A bad client won’t take your calls, takes more than a couple days to reply to emails and then wonders why no progress has been made.

And I’m still not done…

A good client hires a consultant and actually implements their suggestions. 🙂

And still more…

A good client understands that there is no magic wand that can be waved to get top rankings.  They are committed to a long term process and are also committed to SEO as a long term approach that requires both time and money investments.

A bad client is desperate for rankings tomorrow, often doesn’t even worry about actual traffic, they just want to know they have rankings.  They also tend to jump from tactic to tactic and not give anything time to really mature.

A good client understands that there needs to be a balance of keywords – some broader terms with more traffic and some more specific terms with less traffic that will convert at a higher rate.

A bad client wants to get ranked number #1 on Google (by Friday) for single words like “scissors” and “cut” and “hair”

Almost done, just a couple more.

A good client knows they need a multifaceted marketing approach and they need to be willing to try different strategies to determine what works best for them.

A bad client doesn’t want to talk about Twitter or Facebook because they don’t personally like them or use them.  They don’t want PPC because Google charges way too much and they don’t want organic SEO because it takes too long.  They just want lots of traffic – quickly.  (My magic wand just broke – otherwise I’d be all over helping those clients!)

A good client knows that things like email subject lines and headlines on marketing copy need to be tested to improve results.

A bad client already knows that works (because naturally what they like or respond to will work for everyone) so there is no need to test.  (Actually, this is less work – maybe this is a good client after all??  Nah, I’d still rather do the work and get better results!)

A good client says “how often do you think I should post on my Blog?” or “do you think these tweets are really helping me or should I try another approach?” or “my open rates on emails are down, any ideas why?”

I think I will end it there because the last 2 examples say it all.  Internet Marketing doesn’t “work” or “not work”.  Just like offline marketing doesn’t “work” or “not work”.

Within marketing whether online or offline, things take trial and error, persistent, tweaking, testing, time, effort, money, patience and some good people to work together as a team.

Any given strategy may or may not work the first time you try it.  It’s a matter of applying “best practices” and giving it your best shot and then analyzing the data to tweak and try again.  At some point some strategies will be deemed unsuccessful and will be abandoned but only after due time and attention was paid to giving it a real shot.

I know small business struggle with time and money constraints and I know that impacts some of what you can do BUT with the right mindset, a willingness to work with people and an open mind, you’d be amazed at what you can accomplish!

Side note to bad clients: Being a bad client doesn’t mean you are a bad person.  It just means you may be standing in your own way and may need to rethink your approach!

Side note to good clients: You rock!!

Why You Should Hire A Digital Marketing Expert

Tip

Ask prospective marketing professionals about their marketing certifications. Popular and reputable skill-based certifications can indicate that they’re staying ahead of constantly evolving marketing trends.

Editor’s note: Need a online marketing service for your business? Fill out the below questionnaire to have our vendor partners contact you with free information.

Tip

Hire a marketing professional with experience in your specific industry. They’ll be able to track industry trends and offer insights into competitors.

Did You Know?

The best brand-building marketing agencies will help you understand your company’s voice, know your audience and create consistent messages.

In-house marketing professional costs

The upfront cost of hiring a marketing professional varies widely by experience. However, according to ZipRecruiter, a digital marketing manager makes an average annual salary of $55,108. 

You’ll need to consider other factors for a true cost assessment:

Employee benefits: You’ll also need to calculate the cost of the in-house marketing professional’s employee benefits package, which runs between 25% and 40% of their salary. For example, for a marketing salary of $55,000, you’d spend an additional $13,750 to $22,000, for a total cost between $68,750 and $77,000. If you break this down into an hourly cost, assuming a 40-hour work week with two weeks of paid vacation, it’s between $34.38 and $38.50 per hour.

The marketing skill level you need: You’ll also need to consider your marketing professional’s skill level. If your business is in a highly competitive industry, you may need someone more sophisticated and experienced, which will cost you more. However, if you use channel selling or a direct salesforce, or your industry is less competitive, you may do well with someone less experienced who doesn’t cost as much. If they’re on salary, they could also contribute to other aspects of your business. 

Hiring a marketing agency or professional may seem like a significant expenditure. However, the long-term benefits of marketing expertise – including better marketing ROI – can ultimately save you money.

Tip

In your interview questions, ask prospective marketing professionals about challenges they met and overcame on previous projects. Listen not just to what they say but how they say it; a good marketer is a compelling storyteller.

Downsides of not hiring a marketing professional

If you decide to put off hiring a marketing professional, it can hurt your business in the following ways:

You may not do enough marketing. All businesses must market to survive and grow. Even if you have an established customer base, there is always attrition. Customers can become dissatisfied for whatever reason. Perhaps they can no longer afford your product, their needs change or they move away. To replace lost customers, your business must constantly reach out to new prospects and entice them to buy. Without a dedicated marketing professional or agency actively planning, implementing and analyzing, potential new customers can slip through the cracks. You may not be out in front of potential customers, but your competition likely is.

You’ll waste money on ineffective marketing efforts. It’s easy to waste a lot of money on marketing if you don’t know what you’re doing. Marketing is as much science as art, and experienced marketing professionals know the tips and tricks that give their companies a higher ROI. Additionally, they’re focused on marketing KPIs and adept at analyzing data to determine precisely what’s working and what isn’t and then adjusting accordingly. While no marketer has a crystal ball that lets them avoid wasted marketing spend entirely, professionals can detect problems and regroup quickly. 

You may miss out on opportunities. Even if you have a marketing background, new marketing methods and channels always pop up. If you aren’t dedicating a sizable chunk of your time to keeping up with trends and strategies, you’re likely missing out on a platform or tactic that could bring you business. Part of a marketing professional’s job is staying abreast of the latest marketing buzz so that your business is always where it needs to be when it should be there.

You may neglect other crucial business functions. You have many responsibilities as a business owner. If you’re spending an excessive amount of time on marketing, you’re likely neglecting other parts of your business, including managing employees, improving processes, overseeing finances, creating an overall business strategy and forming strategic alliances. Your company can’t afford for you to devote too much time to one business element. 

Improve your bottom line with a marketing expert

If you’re still on the fence about hiring someone to do your marketing, consider this: No one will buy your product or service if they don’t know it exists. Marketing experts know how to get a company noticed and can consistently implement new strategies. It may take a few months to start seeing the results of these strategies, but in the end, it’s an investment that will pay off and allow you to start scaling.

Ryan Ayers contributed to the reporting and writing in this article. 

How To Hire The Linux Talent You Need

Hiring good help is never easy, but the difficulty is compounded considerably when demand for the skills you’re seeking exceeds supply.

That, in fact, is just the situation being faced by companies in search of Linux skills today. In a recent Linux Foundation survey conducted for the operating system’s 20th anniversary, for example, respondents said that one of the biggest challenges for the Linux platform looking ahead is finding SysAdmins and developers with Linux-related skills.

That backs up data from a separate study by the foundation late last year in which more than a third of corporate respondents indicated that they’re worried about finding people with the skills to support their increasing reliance on the free and open source operating system.

It’s a candidate’s market, in other words, in the world of Linux skills today.

So what’s a company in need of Linux skills to do? I spoke recently with both Alice Hill, managing director of chúng tôi and Amanda McPherson, vice president of marketing and developer programs at The Linux Foundation, about this very question. What follows is a collection of their best tips and suggestions.

1. Get Involved

One of the best ways to tap into the Linux talent that’s out there is to be an active part of the community before you’re in desperate need of related skills.

“You have to know who the best hires are before you’re ready to hire,” Hill explained. “Reach out and start building relationships now. This way, the relationship can start to develop before you need each other. Down the road, they’ll be more ready to join your team, and not your competitor’s, if you already know them.”

One way to do that, for example, is to tap into the Dice Talent Network, which allows technology professionals to connect directly with hiring managers at specific companies.

Another good strategy is to “get your developers involved in projects,” McPherson suggested. “The best way to recruit is for your existing developers to be well-known and respected in the community.”

On an organizational level, it’s also a smart move to join groups like the Linux Foundation and the Ada Initiative, McPherson said. Supporting such organizations not only gets you involved with the community and its key events, but it also shows developers that you care about their community and are willing to support it.

Indeed, sponsoring, exhibiting at or at least attending conferences like LinuxCon can also help a company tap into fresh Linux skills. “We actually find most sponsors are looking to raise or extend their profile for hiring and have had a lot of success connecting people at these events,” McPherson told me.

2. Be Specific

Also be sure to specify in your job description the specific Linux distributions you’re focusing on. If you’re seeking someone with expertise in Debian and Ubuntu, for example, you should “be clear about that and help those candidates stand out to you,” Hill recommended. “Same with looking for a single version like Mint. Get that in your job header and make sure it is searchable by keyword.”

One no-no to keep in mind, however: “Whatever you do, do not spam the Linux kernel mailing list with job postings,” McPherson stressed. “Developers don’t take kindly to spam on working mailing lists.”

3. Be Clear

Given that there are more than 11,000 Linux-related jobs on chúng tôi alone, potential employers need to do everything they can to stand out, and a big part of that is making it clear what benefits they have to offer.

“Remember the best candidates have options and, more often than not, one of them is to stay in the job they already have,” Hill explained. “If you want to convince them to take a risk and leave the security of the known, you need to show them clearly how they will be better off in this new role. This has to be reinforced at every stage of the hiring process and certainly in a job posting.”

It’s also worth companies’ while to continue that clear communication even with candidates they don’t end up hiring.

“Most candidates don’t find out why they’ve not been hired–the feedback line goes dark,” Hill noted. “There needs to be a mutual give and take of information between hiring managers and candidates. The benefits of returned calls are an improved reputation.”

4. Be Flexible

Companies should “think creatively about mobility,” Hill says, including seriously considering allowing candidates to telecommute.

“So many companies don’t have robust telecommuting options, but it’s the one benefit that tech professionals say they would give up 10 percent of their salary to have,” she pointed out. “And it definitely makes you stand out in the hiring process.”

5. Repurpose and Retrain

Just because your developer doesn’t already know Linux, that doesn’t mean he or she can’t learn, McPherson pointed out. Often, in fact, it’s far more cost-effective to get the skills that way than to hire someone new, she added.

The Linux Foundation offers developer training that’s being used by companies around the world to re-purpose Unix and proprietary-platform developers to Linux, McPherson noted, and there are numerous other places to get Linux-related training as well.

6. Reward and Retain

Finally, it’s difficult to overstate the importance of treating your staff well, Hill stressed.

“Your employees are your best promoters,” she explained. “In a networked community like technology, putting your company at the top of best practices pays off.”

Customized retention plans, for example, are a good way to keep employees happy, she pointed out, since “a salary increase to one tech professional may be flexible work hours to another.”

Whatever means you choose, though, if you treat your current employees well, Hill said, “they will do their part to fill the pipeline with top talent.”

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