INSIGHTS

Companies who invest in hiring the right people, have maximized returns. At JDI our goal is to help you build a passionate team that ignites growth within your company.

Do you wonder how much your next bad hire will cost your business—thousands, tens of thousands, or even millions? What’s your plan for fighting bad hires and turnover in your hotel? Out of every industry, the hospitality industry has some of the greatest need for temporary workers. However, the higher demand for workers and skill shortage can lead to companies hiring candidates who can get the job done but aren’t the best fit in order to avoid losing productivity.

As a hotel executive, restaurant executive, president, owner, director, or manager of a hospitality firm, you might be thinking, “is that loss worth hiring an average employee?” The answer you’re looking for is NO. A bad hire could cost you 10 times as much as hiring with a hotel recruiter. In fact, according to a CareerBuilder survey on the costs of bad hires, “Forty-one percent of companies estimate that a bad hire for an entry-level position costs more than $30,000, and one in four said it costs more than $60,000.”

Ultimately, the costs of bad hires depend on the employee, their salary, if they’re c-level, management, or entry-level, and how long they have worked for the company. Other factors include employee training, employees who must interview candidates, HR costs, and marketing on job boards. To get an idea, here’s a sample cost breakdown for a bad hotel executive hire in the hospitality industry:

  • Productivity Loss: the employee’s annual salary
  • Training Costs: roughly 35 percent of the employee’s annual salary
  • HR Staff Costs: HR salary, divided by 2,090 hours, multiplied by 30 hours
  • Interviewing Costs: HR salary, divided by 2,090 hours, multiplied by 25 hours
  • Employment Ads: Four LinkedIn ads at $1,600

Another point to remember is that a bad hire isn’t just an individual you hire who quits between six months and a year later. A bad hire could have been with your company for many years and could still be employed there, and they could cost you more the longer they stay there. Given how much bad hires cost, we often over-focus in that area, but this goes beyond straight cash value and often extends into other employees’ productivity. “One subpar employee can throw an entire department into disarray, which puts you at risk of losing your good employees,” Ryan Holmes, Hootsuite CEO, said. 

Ultimately, it’s more difficult for a team/manager to accommodate one underperforming worker than it is to dedicate the time and the money to recruit quality employees, which is what has led to a lot of hospitality businesses enlisting specialized recruitment agencies. While it might seem a bit repetitive or even redundant to consider hospitality recruiters, they know the industry as well as the individuals in it. 

The team at JDI uses a specific model to not only find the top talent in the industry, but our C.L.A.M.P.S. model enables us to attract the very specific candidate you are hoping to find. Rather than rooting through dozens of potential bad hires, you are presented with multiple ideal candidates, all but guaranteeing a good hire. For more information about our hotel recruiting services for clients, click here.

JDI will also be attending the HR in Hospitality Conference & Expo this March in Las Vegas. If you would like to meet up with a member of our team during that conference, please contact us to set up an appointment. You can reach Joe Rice at 480-719-7217 or Jeff Evans at 480-719-7239.

Photo By nd3000