Match: A Systematic, Sane Process for Hiring the Right Person Every Time

Appendix III. The Cost of a Mishire: The Story of the Bad Controller

You Know Jack

During his era, Jack Welch was arguably the most effective and respected CEO in business. Consider all the things a CEO has to do. Now consider: Jack Welch bragged that he spent 50 percent of his time hiring, coaching, and developing his team. That's a lot of man-hours. But that team is what made him so successful. Entrepreneurs have to consider how they spend their time in this regard. The fast-moving small business owner just cannot get by devoting only a minor portion of their time to this important task.

Following is a study we performed on the costs associated with hiring the wrong person. This is a true story, and although just one example, the areas of impact are true for all companies.

Story: The Bad Controller

A client of mine, who is also a friend, called me one day with bad news. She had to fire her controller. She wanted me to help her find a replacement, but in addition, she wanted me to work with her to find out how much this bad controller had cost her company. The results were eye opening. If you're at all a numbers person, you'll love this next part.

The controller had been with the company two years and was forced to resign because of a number of poor business decisions and because he could not manage staff. Here are the costs of that mishire:

1. We first figured out how much it cost to hire the controller:
Recruitment/search fee:	$30,000
Outside testing/profiling:	$1,000
HR department time: ...