My passion is to help small businesses succeed. At BCI, it’s what makes our Monday morning meetings fun and full of life. Your success stories are the coffee in our veins on Monday mornings, and there really is coffee running through our veins too. Seriously, you should see how much coffee we go through in a day!
However, I know for you to succeed you often have to get through challenges. One of the biggest challenges that we hear over and over again is finding and hiring key people for your companies. Man, this isn’t easy is it? The truth is that we struggle with this too, but we have made enough mistakes that we have begun to learn how to do this a little more effectively, and over the next few weeks I want to share a few pieces of wisdom and the mistakes that we won.
First, let’s talk about the cost of hiring the wrong people. I’m not talking about the time and energy cost. I’m talking about cold hard cash cost. If you are anything like me, this is where I feel the pain. If we are really going to succeed at business, we have to have the right people in the right positions. That’s common knowledge. But, what are the stakes of hiring the wrong person?
In the book Hiring Smart, the author gives the equation: if you hire the wrong person for a position in your company and rectify the situation within 6 months the cost of the mistake is 2.5 times the person’s annual salary. Now, based on my research the average annual salary in the United States is $50,000. So, if you hire wrong and fix the mistake in six months that mistake costs you $125,000. OUCH!
So, just to put this in perspective let’s talk about what you can buy for $125, 000.
– Gas for your car for 100 years
– 12 years of tuition to a public college
– 1,316 tickets to Disney world
– 10,416 pizzas from your local pizza place (or pizza every day for 28.5 years)
– A private island in Fiji
That’s right. You can legitimately buy a private island in Fiji for what a bad hire is going to cost you. Let that sink in for a minute. On a side note, if you do decide to buy the island instead of hiring the wrong person, I would be happy to visit your island!
So before you embark on your next hire, take some extra time to think if this person is really going to help move your business forward or if you are giving away a private island.
VP of Operations, BCI