According to The Outsourced Accountant Chairman Nick Sinclair, skills shortage is one of the many reasons why firms come to us. These firms are burdened with the inability to find talents who possess a specific skill set required for certain job roles. It doesn’t necessarily mean they can’t find people in Australia. The problem is, the ones they can find there are not suited to the roles they have available. Through offshoring, firms can get the right people with the right skills at the right price. For many businesses, this is a recurring problem. It’s either they can’t find the resources they need or they find people with the wrong skill sets. And that’s a different problem—a costly one at that.
Financial Impact Of Hiring The Wrong StaffThere is a significant financial impact of hiring the wrong people. The price of a bad hire can actually go as high as millions. In fact, Zappos CEO Tony Hsieh once estimated that the cost of hiring the wrong employees has cost the company more than $100 million. Business Review Australia reported that a bad hire can cost a company as much as two and a half times the salary of an employee. Meanwhile, the U.S. Department of Labor indicated that hiring the wrong employee will cost at least 30% of the staff’s first annual earnings.
Impact On Group Morale And ProductivityA wrong call in hiring will not only impact your company financially. It will also have an effect on the group morale, which eventually affects the team’s productivity. It’s like a bad apple—it spoils the entire bunch. Employees who lack motivation can influence others. Employee disengagement is like a virus; it’s contagious. And employers may find it difficult to counter it. One study by Gallup tracked employee engagement and found that only 15% of employees are engaged. It also revealed that disengaged staff can cost their company $2,246 in earnings each year. All it takes is one unmotivated, disengaged individual to slack at work (or perform poorly) to pull everybody down. The rest of the team will be forced to compensate by picking up the slack. When that happens on a consistent basis, those who are forced to do more work may get exhausted and, eventually, throw in the towel. It’s not uncommon to see well-performing employees leave just because of situations like this. You clearly do not want to lose great employees just because you made a wrong call in hiring a certain individual. Getting a bad hire can also negatively affect your culture. And its negative effects can remain even after that specific employee has been let go. For example, a disengaged employee can display unproductive behaviour, which can be picked up by others. A negative change in work ethic can be hard to solve. The company would have to invest time, effort, and even money to bring them back to the level of productivity and efficiency they had before.
Finding The Right Team MembersRecruiting the right people can help your firm avoid costly mistakes. It’s important to spend as much time as needed in selecting your candidates. Rushing into hiring can potentially be harmful to the business because investing resources into someone who’ll possibly end up pulling down the team’s productivity and morale will cost you more. Not to mention the undue stress it will cause you. So it will be in your best interest to take your time and really scrutinize your potential hire. And make the right decision the first time. Ultimately, it is vital that you go through the recruitment process as quickly as you can because the war for talent is hot especially in places like the Philippines. That doesn’t mean, however, that you should rush into the process. You have to make sure that you move at a pace where you are comfortable and one that allows you to really get to know the candidate and see if he or she is the perfect fit for your firm. Bear in mind: move quickly, prepare well, set aside time, and keep an open mind. Get the latest accounting industry updates in your inbox by subscribing to The Ledger now. Click here to sign up. We’re cooking up something exciting for you. Get first-hand information on how to drive success to your firm from industry experts in our very own podcast called The Offshore Accountant Podcast. Stay tuned!
Looking to scale your business by getting the right people to do specific roles? Call our global offshoring specialists at 1300 896 522 or click here to download our blueprint on how to build a global accounting team.