|
Apart from the traditional costs of a bad hire, which include recruiting costs, training investments,
and supervisory coaching time, a bad hire in a customer contact job will have a direct impact on customer retention.
Customers who are ill treated leave for competitors.
Fred Reinheld, author of The Loyalty Effect: The Hidden Force Behind Growth, Profits and Lasting Value,
estimates that the average company loses 50% of its customers in 5 years. Think
of what just a small improvement in customer retention could mean to your bottom-line profits!
(Reinheld suggests that a 5% improvement in retention would result in a 25% increase in profits for most organizations.)
If you include lost production, supervisor time, hiring and training costs, equipment failure, and poor service to customers, the cost of a bad hire can be minimally estimated by:
Hourly rate X 400
Even at $6.00 an hour, the cost of a bad hire is at least $2400!
|
