How To Save Yourself The High Cost Of A Wrong Hire

I’m a self-confessed entrepreneur with all the trappings of bootstrapping, scaling grand ideas, and being an early adopter. And I am also a big believer--in interns.

Internship programs have gotten a lot of flack of late. They are not free labor. They shouldn't be treated as such, and quite frankly, they aren't anyway. Management is time, which equals money. "Returns" (people seeking second careers) and interns can be an amazing, long-term asset to your company. They can save you thousands or even millions of dollars.

We have more than 10 returnships and internships at UniversalGiving, and we’ve found it to be a very positive experience. It’s our goal to provide them a great work environment, ownership, management guidance and a positive atmosphere. We also achieve many of our goals through them. It turns out to be very productive for both.

First, interns are not about age or recent grads. These days, people are soul-searching. We're talking about forty- and fiftysomethings wanting to find a way to contribute with impact, and ideally meaning, at your company. We call these "returnships." Some are not sure what they want to do and would like to try out a new skill. Others are trying out our industry. Some simply need a kind, structured, productive environment while seeking employment. Some just need a break.

Our solution: We give them all great experience and put them right to work. Even if they eventually decide it is not for them, they have learned a lot, and we have benefited. We organize the tasks so that they build to our goals. Those who move past “Level 1″ of marketing research, for example, might be advanced to handling marketing partnerships. In essence, whether it is employees, interns, or volunteers, good management and proper delegation per each skill level is essential.

Yet what's really critical is that often our interns are a feeder to employment: They might “graduate” to consultant and then to employee. We see this often, and it's mutually determining the following: Is this a good "professional marriage"?

It allows both parties to see if the skills fit, and if the values fit. Someone could be talented yet not enjoy our culture, or we might not feel alignment. Rather than try to determine a good fit by interviews (and some people are great at interviewing, but not necessarily great for the job), we both get practical experience working together.

If you aren't convinced interns are the way to go, or you think they are too much time, you might want to rethink. The cost of a wrong hire can be thousands, if not hundreds of thousands, of dollars. You've spent the time training, then there is a vacuum in your organization when they go. You've spent 3, 4, 6 months of your employees' time (= expensive) getting someone up to speed. Then your employees need to get someone new up to speed. But first, they have to begin the rehiring process, again. More money. More time. More weight on the organization.

And don't forget the morale cost. This is where it is most heavy on the team, and we have to be considerate of our people. We should respect the energy and investment of their time.

To spell it out, the typical costs of recruiting and hiring, according to GradStaff, are: 

$5,700 - $8,900: Average amount to recruit for an entry-level position

$1,000 - $1,500: Average amount to train a new employee

$5,700 - $8,900: Cost of second recruitment round

$1,000 - $1,500: Cost of second training round

The total morale cost depends on how many people were affected, but suffice it to say it's significant. 

So contribute to the bottom line by cultivating returnships and internships as part of your team. Grow these contributors, embrace them, and help them succeed. Within a matter of weeks, they can be inspired and reach their goals, while also making a measurable impact on your work. For proof's sake, our top two leaders started out in "returnships." They were seasoned executives returning to a new career path, and are now fully on staff.

Statistics Source: GradStaff

[Image: Flickr user Blip ou Bruno Veloso]

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7 Comments

  • Denise Iordache

    Pamela, thanks for the reply and offer of support!
    If I decide to set up such a program, I will definitely let you know.
    Regards,
    Denise

  • pamelahawley

    Denise, thank you for your wise comments!    And you are right. It does take time... 

    All good investments do.  Let me know if you need help setting up an effective program.

    all best, Pamela

  • pamelahawley

    Chris, you are right there are many tools out there such as Unrabble and others.

    Nothing replaces EQ,  in-person interaction and the long-term testing out of a relationship.  No software or technology can replace this.

  • pamelahawley

    Missy, thank you for your message. I agree that interns can be 'cheaper" but that's what people normally think of - and it's not always the case.

    You also mention that you presume interns are more inexperienced.  I'd question that. See the section on Returnships -- these are experienced people with core competencies. They don't take  much time to get up to speed, and they aren't junior.

    Secondly, many interns have to get *us* up to speed.  Younger interns quickly grasp social media -- and live it -- more than anyone over 27.  Even people who use social media avidly in their late 20s use it differently than the most recent graduates.  They can help get you up to speed on how best to use it for your business; it's  not us getting them up to speed. 

  • Missy T

    How do the costs of hiring and training interns (often times every 3-6 months) compare to the costs of finding and training new hires? Wouldn't the costs of training be higher, presuming the intern is less experienced than a new hire? Are we just discussing syntax (just calling someone an "intern"? I believe the only way you save with an intern are in salary (usually much, much lower for interns, of course) and benefits. Neither of these were discussed though. Seems fishy...

  • Christopher Harris

    You shouldn't have to pay that much or spend that much time to hire a new person, unless you're doing it the old fashioned way with resumes.

    Unrabble is a unique hiring software solution for hiring managers that completely eliminates the resume from the hiring process, thereby saving incredible amounts of time and money for the hiring manager. It's free at http://www.unrabble.comChris

  • Denise Iordache

    Hi Pamela,
    I enjoyed this article and your perspective when it comes to having interns working within a company. In most cases (and in my personal experience) interns are seen like free/cheap work force and are treated as such by companies. And it is a pity because great creative minds start off as interns, but the companies are too self-absorbed to realize what they have before they loose them.
    Regards,
    Denise