Business professionals are all too familiar with the calculation of ROI, return on investment. But how do you calculate a loss on investment? This is the kind of math you don’t want to have to do, but if you’re hiring the wrong people, it’s an equation that you need to get familiar with.
Of course, the actual cost is challenging to pin down as it varies greatly from situation to situation, but some safe assumptions can be made to help us get there. For example, founder of LinkHumans and notable former recruiter Jörgen Sundberg is cited by Forbes and Inc. for his calculation, taking into account
- Hiring costs
- Total compensation
- Cost of maintaining employees
- Disruption costs
- Mistakes, failures, and missed business opportunities.