I just watched the Four Corners program last evening and it makes for some very interesting viewing.

Apparently there are some 780,000 people seeking work but only about 150,000 jobs so people are getting parked in the system because it is too difficult for the job service provider to get a good financial outcome if they spend time trying to place them.

According to 4 Corners $1.3 billion goes into the Job Service Australia network of providers each year and another $ 600 million into training courses run by the training arms of the service providers….that’s a lot of money.

If you’re interested in finding out how much the job service provider gets from the government when you walk in their door to register and what they get paid beyond that to find you a job maybe it would be worth viewing the 4 Corners investigative report that went to air last night…You can view it on-line on ABC-iview … and it’s called The Jobs Game….Riveting stuff !!

The address is http://iview.abc.net.au/programs/four-corners/NC1504H004S00

We all know that hiring the wrong employees can cost organizations a huge amount of money.

But here are some startling figures.

When it comes down to it, getting the right fit the first time matters a lot more than you thought it did.

Let’s look at the list of things that can add up when an appointment goes wrong.

(Based on hiring an employee on $52000. per year)

• Hiring Costs include: (conservative estimates only)
  Advertising the position                                                                                          $500
  Reading resumes – 20 hours of your time @ $50 /hour                                         $1000
  Screening applicants and short listing – another 20 hours of your time                 $1000
  Interviewing the best 3 applicants – another 8 hours of your time                          $  400
  Checking references – phone conversations with referees = 3 hours                    $  150

• Cost of maintaining the employee through three non-productive early months
  probably equates to 50% of 3 months wages – $52000/4 x 50%                             $6500
• Disruption when they leave or are terminated = loss of productivity until
  replaced could easily equal the cost of those non-productive early months            $6500
• Severance – payouts on departure = accrued leave entitlements, depending
  on length of employment could be at least another month’s wages                         $4300
• Total                                                                                                                       $20350

Plus
Lost business is another variable that can vary with every business so
must be an add-on and
Replacement costs which must be incurred again

It is not inconceivable that a “bad hire” could be a $50,000 – 100,000 mistake and most business managers are not professional recruiters so chances are bad hires will occur from time to time.

So, how can a business avoid the “bad hire” risk?

One way could be to labour hire a casual for the first 3 months with a negotiable transfer fee to take the candidate on permanently at a later date. If the person works out well and fits with the culture of the business and other staff, this is low risk with no interviewing costs, minimal disruption if a changeover is required and no severance costs on departure. Savings are substantial and a professional recruitment is a virtual certainty…and it’s worth a thought.