The most of us think of ourselves as a good people. We just live our lives well, want no harm to anybody, and doing our job the best way we can. We think of the future, build products, master service, strengthen community and growing everything around. However, not all people think this way. Some might have direct evil intent (that is a question of overall security, has top priority, and is out of the topic therefore). The others experience a strong competence shortfall and/or deep cultural/value differences [with your company], and this melody is specifically about them.
Let's start from the most obvious and measurable things like direct expenses:
- Recruitment: recruitment fee/bonus, traveling expenses for all candidates, external assessments and background investigations, sign-on bonus, relocation package
- Salary and bonuses: all-the-time salary, all types of taxes, pension plan, all social expenses (social package), insurance, bonuses, stock options
- Severance: retirement benefit, outplacement consultancy, possible legal costs
- Initial procurement: furniture, computer/tablet, specific equipment, a car
- Everyday business expenses: software licenses, specific production licenses, traveling expenses, representational expenses, assets amortization, office rent, office supply
- And so on: team building events, business events, business clubs, education, certification
The second important thing is the cost of time:
- Operational time: average recruitment period takes 3 months, an average wrong hired employee works for a half of a year
- Time of people: HR-manager (recruitment, onboarding, operational activity), assistants (all the time), linear manager (recruitment, onboarding, teaching, managing, troubleshooting, firing), functional/project manager (project engagement, troubleshooting), trainers & mentors (onboarding and initial education), subordinates (onboarding and doing wrong tasks), colleagues (troubleshooting and getting things back on track), and customers of course (initiating, controlling, troubleshooting)
And of course, you should think of problems and missed opportunities:
- Shortfalls in profits: aborted contracts, slowed down and inhibited processes
- Redundant expenses: wrong decisions, disastrous projects, wrong procurement
- Threats for the future: common reputational risks, possible legal consequences, discrediting management authorities (governability degradation), damage to team spirit (decreasing loyalty, possible resignations), harmed relations with clients / contractors / within a team, domino effect of more mis-hires, miscompetencies caught by the team, and so on.
Some of these can be easily counted, some look someway abstract. However, recall any of your last mishires, take a spreadsheet and value every point in currency. You'll be really surprised of the drawn picture and the core of the problem is that you won't believe the total :)