Bad Hires Cost Small Businesses Money
The economy has picked up, and with it, so too has the labor market. At last count, U.S. employers added 165,000 jobs in April; considering small businesses are the backbone of the economy, a lot of that hiring has taken place at smaller companies.
But entrepreneurs who have hiring intentions need to make sure they’re properly vetting applicants when making employment decisions, lest they put their cash flow at risk by making a bad hire.
According to a recent survey from CareerBuilder, 27 percent of U.S. employers reported that a bad hire cost them more than $50,000. That’s a lot of money, considering 66 percent of hiring managers reported making a bad hire.
But that’s not the only tangible monetary effect bad hires have on small businesses. Thirty-six percent of U.S. respondents reported a bad hire led to decreased productivity, 10 percent cited fewer sales, and 31 percent said it cost them extra to recruit and train another worker.
Additionally, bad hires negatively affected workforce morale (32 percent) and client relationships (18 percent).
Bad hires carry a slew of risks for small businesses that can have a devastating impact on finances. For firms recovering from a bad hire, consult National Funding on what small business loan or merchant cash advance options are available that can help right the ship.