Some will be looking at this figure through squinted eyes, but it costs an average of $22,750 to complete the whole hiring process of a developer. Costs include advertising, as well as the time it takes to review curriculums, carry out phone/tech screening and hold interviews. Before you start panicking, think about the return on investment. An excellent developer will increase your production, provide the team with innovating ideas and become a key part of the overall achievement of goals. We are going to take a very realistic look at the costs incurred when a new developer doesn’t turn out the way you had hoped, not just financially, but on the team morale.

Calculating the mistake

In can take anywhere from 6 months to a whole year for a new hire to reach their full productivity. We will e optimistic and use 6 months in our example. A good hire will show an output multiplier (the number used to calculate employee profit) of between 1.875 and 2.5. This works out to mean a new developer earning $80,000/year will make a return of between $150K to $200K in profit.

A bad hire will have an output multiplier of 1 (or less if they are terrible!). This implies that in the 6 months that you have had them on your team they will have cost you $40,000 in salary, in addition, you have to consider the half a year of profits you have missed out on., $75,000 and the $22,750 it cost you in the first place to recruit them. The total figure is around $138,750. But it gets worse.

The Butterfly Effect

When it is time to get rid of a bad hire, it has a negative effect on each and every department. HR needs to start the lengthy recruitment process again, which may involve everyone from engineers to managers. Accountants have to rework budgets to include potential legal fees and severance packages.

Leave the financial cost to one side, and think about what it does to the overall atmosphere in the office. Starting over adds work to various departments which means people aren’t spending time on their tasks, productivity falls and it becomes somewhat difficult to achieve company objectives. Now stakeholders are shifting their opinions of your company. The bad butterfly that flapped its wings may have an effect on the business plan for up to 5 years.

Thinking on the positive

It’s harsh, it really is. But you are the drive behind your business and people will follow your example. The bad hire is gone and it is time to focus on not just a good hire, but now an outstanding developer. The trick is to make sure the whole team ais feeling as positive as you are. You really don’t want your excellent potential developer picking up on negative vibes because your recruitment team is bored with the thought of starting again. Follow hiring advice to the T, that way your new hire may be able to recuperate some of the money previously lost.

Recruitment agencies can help you find and shortlist high-quality candidates. Using a staffing agency will improve the quality of candidates in your recruitment process. As we already mentioned, recruitment agencies keep a pool of experienced candidates who are ready for a career move at a moment’s notice. It means that you will only deal with candidates who are carefully assessed and vetted.