top of page
  • Writer's pictureEmployal Recruitment

Unlocking the Money-Saving Secrets: How a Consultant Can Rescue Your Recruitment Budget!

Updated: Aug 2, 2023

Recruitment is a critical process for businesses worldwide, and while the frequency and magnitude of hiring may vary, the financial impact remains significant. Hiring the wrong candidate can lead to hidden costs that extend far beyond the initial recruitment expenses. High turnover rates, training costs, team morale, and lost productivity are some of the repercussions of ineffective recruitment practices. Hiring a new employee can undoubtedly lead to substantial expenses. According to the Society for Human Resource Management (SHRM), the average cost of recruiting an employee falls within the range of $4,000 to $5,000, and this cost significantly increases for executive positions, reaching three times the amount. However, these expenses solely pertain to the recruitment process itself. If, unfortunately, the hired employee proves to be unsuitable for the role, the company not only loses the initial recruitment cost but also incurs potential training expenses, loss of time for management who interviewed, those in the organisation that screened the candidates and sifted the resumes. In such cases, the company must restart the recruitment process to find a replacement, which can escalate the total expenditure significantly.

Realistically, companies may end up spending a considerable sum, ranging from $8,000 to $20,000 or more, to identify a suitable candidate for the position. Furthermore, the repercussions of hiring an unfit employee extend beyond financial implications. There are also notable losses in time and productivity when a bad hire eventually departs. This becomes particularly evident when the employee was assigned to work on time-sensitive projects with approaching deadlines or specific deliverables. This creates a gap in your service offer and downtime if the person is part of a wider team.

However, there is a solution to mitigate these costs and optimise the hiring process – partnering with a recruitment company that can manage this whole process and ensure that you always have people in the pipeline for the event that you do lose staff or the team changes. Today, we will delve into the financial implications of ineffective recruitment, and demonstrate how recruitment consultants can save you money by identifying the right candidates for your business in advance of things going wrong.

Examining the Financial Implications of Ineffective Recruitment

A poor hiring decision may certainly incur other ‘hidden costs’, and it’s not always quantifiable.

High Turnover Rates

Ineffective recruitment practices can often lead to the selection of candidates who are ill-suited for the organisation or the position. Consequently, these employees may depart shortly after being hired, resulting in elevated turnover rates. The costs associated such as recruitment, onboarding, training, and the loss of productivity while seeking a replacement can add up. Moreover, a substantial employee turnover can disrupt team cohesion, diminish employee morale, and have a detrimental effect on overall productivity, effectiveness, and your bottom line.

According to estimates by the Society for Human Resource Management (SHRM), the total cost incurred when a bad hire leaves, including lost productivity and training hours, typically amounts to around 40% of the individual's salary. To contextualise this, if an employee earns an annual base salary of $50,000, the cost of such a departure would be approximately $20,000. Additionally, if the unsuitable hire is in a customer-facing role, the negative impact becomes apparent to customers, leading to potential confusion, uncertainty, or even a decline in trust towards your company and brand.

Training Expenses

When organisations hire candidates lacking the necessary skills and qualifications, significant investment is required to train them and bring them up to the required standards. The costs of formal training programs, workshops, seminars, and the time spent by managers and mentors in coaching new hires. Often these training programs are paid for in advance which could see the money being forfeited.

Lost Productivity

Apart from the obvious cost-cutting concerns, a poor hire can cast a shadow on productivity levels within the organisation. Ineffective recruitment can result in a prolonged hiring process and hiring candidates who struggle to meet the job requirements. As a result, productivity levels may suffer, and existing employees may be forced to take on additional responsibilities or redo the work of underperforming colleagues. This incurs an expense for the company, as the new employee is operating at full pay but with reduced productivity, and their experienced colleague is dedicating time from their schedule to provide support. This increased workload can lead to burnout and reduced overall efficiency, adversely affecting the company's bottom line.

Reduced organisational morale

Reduced organisational morale is a critical concern resulting from a bad hire. When a new employee displays toxic behaviours that hurt their colleagues' morale and wellbeing, or simply doesn't fit well with the team and company culture, it creates tension and strain within the organisation. Such situations not only affects existing employees' attitudes toward their jobs, co-workers, or the company itself, but also lead to negative impacts on job satisfaction, employee engagement, and overall morale, not to mention your employer brand.

Moreover, the repercussions extend beyond the emotional aspect. They might even end up involved in projects they were not originally hired for, causing further stress and inefficiencies. These factors, along with a mismatched company culture, can damage the organisation's reputation amplifying the financial impact of ineffective recruitment practices.

How a Recruitment Consultant Can Mitigate These Costs

What measures can be implemented to prevent making a poor hiring decision? And, how can a recruitment consultant help you in your hiring process?

1. Identifying the Right Candidates

Recruitment consultants can possess extensive industry knowledge and a broad network, enabling them to identify candidates with the right skills, experience, and cultural fit for an organisation. They can ‘keep their eyes open’ for you knowing the company and the type of person that would fit well within the organisation. The consultant can float new candidates past you for consideration once they understand the dynamics.

2. Streamlining the Recruitment Process

Recruitment consultants specialise in streamlining the hiring process, handling tasks such as posting job ads, screening resumes, conducting initial interviews, and checking references which can all be done in advance and quickly by an experienced team. This streamlined approach saves time and resources, allowing internal HR teams to focus on other essential aspects of their roles.

3. Minimising Training Costs

This is just one of the key advantages of working with recruitment consultants–their ability to find candidates who already possess the necessary skills and qualifications for the job to minimise the amount of time and costs dedicated to training them. They can select people that are job ready rather than those needing the skills. By reducing the need for extensive training programs, recruitment consultants contribute to cost savings in both formal training expenses and the time invested in training new hires.

4. Reducing Turnover Rates

Recruitment consultants excel at identifying candidates who align with the organisational culture and values. When employees resonate with the company's mission and values, they are more likely to remain engaged and committed to their roles, resulting in longer retention periods and significant cost savings. In many cases, recruiters have a period of guarantee so that risk lies with them instead of your organisation.

The Key Takeaway

Ineffective recruitment practices can have severe financial implications for businesses. High turnover rates, training expenses, and lost productivity create hidden costs that hinder an organisation's growth and success. However, these costs can be mitigated through strategic collaboration with a recruitment consultant, especially if you are prepared to partner with a company and consider candidates even when the need may not be present. Recruitment consultants excel in identifying the right candidates who possess the necessary skills, cultural fit, and long-term potential. By streamlining the hiring process and reducing turnover rates, recruitment consultants help businesses achieve cost savings and build a talented and engaged workforce. Investing in finding the right talent from the start not only saves money but also fosters a positive company culture and boosts productivity, positioning organisations for sustainable growth and success in the long run. If you are looking to avoid these hidden costs and take your recruitment process to the next level, get in touch with us now, we can help. We are here with you.


Asbury, H. The cost of a bad hire – 3 major impacts. Talogy.

Farrell, L. What Poor Recruitment Practices Really Cost You. Berkshire.

What is the cost of making a bad hire?. Agency Central.



bottom of page