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Person 1 |
Person 2 |
Person 3 |
| 1. Total costs in hiring the person |
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- Recruitment/search fess (any guarantee? If so, was money recovered?)
- Outside testing, interviewing, record checking, physical exam, drug test, background check
- HR department -wage x hours for reviewing resumes, phone interviews, in person interviews - for all candidates)
- Travel costs (for all candidates, spouses, other executives traveling to meet candidate)
- Time/expenses of non HR people participating in process (all candidates)
- Relocation (moving household goods, purchasing house for candidate)
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| 2. Compensation: (sum for all years person was in job) |
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- Base ($__________ x number of years)
- Bonuses ("signing," performance, etc.) for all years
- Stock options (realized for all years), benefits, car
- Other forms of compensation - benfits, tool allowance etc.
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| 3. Maintaining person in job: (sum for all years person was in job) |
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- Administrative assistant for all years
- Office/vehicle "rental" for all years
- Furniture, computer, equipment (mobile phone), travel for all years
- Training - remember to include inhouse training - hours x wage of trainee and trainer
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| 4. Total severance: |
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- Severance fee (salary, benefits, use of office), lawyer fees
- Outplacement counseling fee - HR department
- Costs in unemployment or lawsuits caused by the person.
- Administrative costs is separation, wasted time of people in separation
- "Bad press" (loss of corporate good will, reputation)
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| 5. Mistakes/Failures (missed and wasted business opportunities) |
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- Loss company revenue while replacement ramps (applies to sales reps or selling techs).
- Drove a key customer away
- Impaired customer loyalty
- Mis-hired three people at total cost of $2.3M (applies to a manager)
- Wasted $700K on software that had to be scrapped (applies to a manager)
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| 6. Disruption (Costs of inefficiency in the organization) |
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- Lower morale, lower productivity
- Impaired teamwork
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| 7. SUM OF ALL COSTS (#1 through #6) |
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| 8. Estimated Value of their Revenue Contribution |
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| 9. NET COST OF MIS-HIRE (#8 - #9) |
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| 10. AVERAGE COST OF MIS-HIRE |
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