A GREAT HIRE CREATES 2-5X MORE VALUE THAN A BAD HIRE (AT MINIMUM)

Occasionally, you'll get asked - does it really matter who you hire?

The answer is yes - more than you realize.

Principle 44 is why.

Every person you hire will create value for your company - at least you hope.

Ideally, they create at least more value than what you're paying them. Otherwise, why would you hire them? 

Unfortunately, many hires don't achieve this outcome. 

Why? Here's 3 reasons.

1) TURNOVER

It's estimated to cost 30% of an employee's annual salary to replace him/her, according to the Department of Labor.

Employees also often take 1-2 months to train / onboard before contributing (i.e., another 10-20% of their salary).

That means an employee who turns over in their first 3 months may cost you almost half of their salary!

2) POOR QUALITY WORK

A bad hire produces poor quality work. Poor quality work brings a host of likely additional costs:

 - For one, that employee will require more training, supervision, and re-work till they get it right (all of which bear their own cost).

-Additionally, poor quality work negatively impacts customers, employees, or whoever it is that is supposed to benefit from that work that would otherwise be of a higher quality.

3) NEGATIVE IMPACT ON OTHERS

Lastly, just as a good hire, a bad hire impacts those around them. If you think one bad attitude employee is bad, just wait till he/she infects those around them.  That's where the worst costs come.

----

When taking into account all costs (as well as the opportunity cost), we estimate that a good hire creates at 2-5 times more value (or ROI) than a bad hire - AT MINIMUM.

Don't forget this when you're making your next hire.  Yes - who you hire matters. A LOT.