About Donna Warrick

With 20+ years in training and development, Donna brings solid experience facilitating programs for team development, leadership development, change management, conflict management and presentation skills to name a few. Her dynamic, interactive style makes being in her programs both educational and enjoyable.


Whether you are a large or small organization, have low or high turnover, you probably think you understand the cost of hiring someone new into your company. There’s the cost of advertising, interviewing, drug testing, onboarding, training, etc. But what are the hidden costs of hiring the wrong person? What if you find out months or even years down the road you hired the wrong person from the beginning?

The True Cost Of Making The Wrong Hire

Research from Gallup shows 67% of your employees are not engaged at work. What does that mean in practical terms?

  • Organizations with low engagement experience higher turnover.
  • Companies with low engagement scores earn an operating income of 32% lower than companies with more engaged employees.

In contrast, companies with high engagement:

  • Have earnings-per-share levels 2.6 times higher than companies with low engagement
  • Organizations with highly engaged employees experience a 7x-greater 5-year total annual shareholder return than organizations with less-engaged employees.

Think back to when you started your job, you were likely excited and eager to learn. So how do your employees become disengaged? The chart below illustrates a typical process for having engaged or unengaged employees:

 an infographic explaining the true cost of a bad hire

In Quadrant 1 employees are hired and brought into the organization. Regardless of the job, most employees are highly engaged and chomping at the bit to get started. They are not particularly competent at this stage but are learning and their competency and value to the organization grow each day. Employees stay in Quadrant 1 for 3-12 months depending on the complexity of the job.

In Quadrant 2 employees are highly engaged and have learned enough to be fully competent and of high value to the organization. If the job is a good fit for the motivational needs of the employee, they may stay in Quadrant 2 for quite a while and this is obviously where we want all our employees to be and stay if possible. Unfortunately, we know most employees are not fully engaged so many moves to Quadrant 3.

In Quadrant 3 employees become disengaged and over time begin to lose their competence. If they stay in Quadrant 3 long enough, they may move to Quadrant 4. It is possible for the employee to become re-engaged either through strong leadership or through a new project or role opportunities within the company, moving back to Quadrant 2.

If employees move to Quadrant 4, they can become so disengaged they lose competency. If an employee stays in Quadrant 4 for very long, they will either leave on their own or be fired at which point the employer starts the cycle over, hiring a new employee.

What causes loss of employee engagement? Is it:

  1. Lack of effective leadership
  2. No shared vision
  3. Weak or toxic organizational culture
  4. Poor communication
  5. The job does not meet the motivational needs of the employee
  6. All of the above

The answer varies from one organization to the next but most often the answer is some level of “All of the above.”

Turn-over is just the cost of doing business, right? But what is the cost, really? Earlier we shared how engagement impacts performance metrics over time. Based on the employee engagement process model let’s explore the real $ cost of low engagement.

Sample Cost To ABC Widget Company
Total number of employees 100
X Percentage in Quadrant 3 (per Gallup research) 67%
Estimated number of employees in Quadrant 3 67
X Average Monthly Compensation per employee in Quadrant 3 $4,000.00
Estimated Average monthly compensation for Employees in Quadrant 3 $268,000.00
X Cost of lost effectiveness (100-67%) 33%
Estimated Monthly Cost of employees in Quadrant 3 $88,440.00
Estimated Annual cost of lost productivity of employees in Quadrant 3 $1,061,280.00

This is just a model and you may say that number is wrong and unfortunately you would be right. This example only considers the hard cost of each disengaged employee in Quadrant 3. That’s bad enough but these disengaged individuals don’t just sit there quietly.  They play a game called “ain’t it awful”, recruiting others to their side. They do this in the break room, over a beer after work or even at company events. You know it’s true because you’ve seen it and maybe at some point in your career played the game yourself.

How To Avoid The True Cost Of The Wrong Hire

It doesn’t have to be this way. Even under the best circumstances you will have disengaged employees, but you can dramatically reduce their numbers and improve your bottom-line in doing so. Here are a few things you should consider:

  1. Use assessments in your hiring process. Scientifically valid assessments like those Jamesson Solutions offers are the only way to get an objective view of how the person will show up to work behaviorally and if the job fits the motivational needs of the person. You are not doing yourself or the applicant any favors putting them in a job that does not fit them.
  2. Have a clear mission and vision for your company and make sure everyone in the organization knows them, what they mean and what their role is in making the mission and vision happen
  3. Assess your current organizational culture and whether that culture is conducive to enacting your company’s mission and vision. If not, actively work to make the needed changes to your culture.
  4. Most are not born leaders but rather grow to become leaders over time, through learning on the job, through mentorship and through dedicated, focused leadership development. It is as critical to your organization for you have a solid leadership pipeline as it is to have a solid sales pipeline. So, make sure you are developing your people at every level.

About Jamesson Solutions

Specializing in workforce development, talent selection, and personality assessment and evaluation, Jamesson Solutions provides numerous proprietary tools and methodologies to find the right people to fit the right roles, provide visibility and action plans for management, and Business Simulations that allow people to learn through self-discovery and by doing.

Each Jamesson Solutions Associate brings her/his own unique experience in developing individuals and improving organizational effectiveness to each client engagement. Their interest, their passion and their commitment are in supporting you, the client, and your organization in achieving your objectives NOW and in the future.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.

 


Are you getting the most out of your people? It’s complicated. Increasing employee engagement is a critical component of a healthy workplace. If you’re looking for ways to improve this important metric, keep reading to learn how you can get more from your talented workforce.

Employee Engagement Metrics

According to a recent Gallup Poll, only 33% of employees are engaged in their work.  Another survey cites a lack of appreciation as one of the most significant reasons people are disengaged or leave the job.  Well then, the problem is solved; to get your employees engaged and to retain them, you only need to make sure you show them more appreciation. If only it were that simple.

As managers and leaders, we are bombarded with statistics that tell us or imply the reasons ALL employees are more engaged or less engaged, why they leave or stay in a job.

The problem with this approach is it really tries to apply a one-size-fits-all solution. It attempts to answer the problem in simple terms.

The challenge is understandable by anyone who has tried on a shoe that is two sizes too small…it just doesn’t fit. It fits many people but not everyone.

As leaders, we are challenged to find solutions that motivate and engage everyone to the best of our ability and that solution is not a one size fits all possibility as much as we would like it to be.

“The old ways — annual reviews, forced rankings, outdated competencies —
no longer achieve the intended results.”

Jim Clifton, Chairman and CEO, Gallup

What Appreciation Means To You Versus Your Employees

The truth is even if the survey that cited lack of appreciation is generally correct, it doesn’t go deep enough. What does appreciation mean to you?  If asked that question, you probably have a very quick answer that is solid and real… but it’s just for you. Personally, appreciation to me means I received a raise or bonus for the good work I did. For someone else, it might be my manager praising me in front of all the staff. While for another, having a manager come into my office and tell me quietly and in person how much they appreciate my contribution would do the trick.

The point is we are all motivated by different things. The leader’s job is to understand how each of us are motivated and work to make sure the job rewards what motivates us.

Understanding Staff On An Individual Level

Over time we can observe if a person is more or less dominant, more or less outgoing, detail-oriented or not; in other words, HOW they go about doing their work. Understanding WHY they do their work or, more accurately, what motivates them is challenging and requires more sleuthing on the part of the leader.

It’s natural for us to project our own “WHY,” and that’s the biggest trap leaders face. We have developed our own assessments that take the guesswork out of those processes and accurately identify an individual’s WHY, making a Leader’s job much easier.

The key is to put your own notions of need aside and really understand your people’s needs may be very different from your own.  It takes a little more time upfront but, in the end, it will save you time in refilling positions and improve your organization’s performance.

About Jamesson Solutions

Specializing in workforce development, talent selection, and personality assessment and evaluation, Jamesson Solutions provides numerous proprietary tools and methodologies to find the right people to fit the right roles, provide visibility and action plans for management, and Business Simulations that allow people to learn through self-discovery and by doing.

Each Jamesson Solutions Associate brings her/his own unique experience in developing individuals and improving organizational effectiveness to each client engagement. Their interest, their passion and their commitment are in supporting you, the client, and your organization in achieving your objectives NOW and in the future.

About Encompass Solutions

Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers and Distributors. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.