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Avoiding the High Cost of a Bad Hire in the Mining Industry

mining recruitment avoid bad hires

The Escalating Expenses of a Bad Hire

In the mining industry "the cost of hiring the wrong person can be catastrophic" to quote directly from this informative article at Mining People International. The cost multiples of a bad hire can't be underestimated. In mining, employing the wrong General Manager for a site at the yearly salary of $300,000 could hit your bottom line for as much as $750,000.

Leaving a bad hire in place, perhaps hoping the employee can turn things around, often makes a bad situation worse. 

While all new employees will require extra onboarding attention and site-specific orientation training, the bad hire will require excessive oversight with no signs of improvement. Competent employees are taken away from their own responsibilities, and resentment abounds when they're forced to "cover" for the insufficiencies of the bad hire.

Justified resentments can be contagious and one bad hire can open the door to an exodus of your operation's most competent employees in this competitive age where top-level professional mining talent is in high demand. 10% of all employee turnover is attributed to hiring mistakes. 

The general rule of thumb for calculating the cost of a "bad hire" or "mis-hiring" is 2-1/2 times the misfit employee's salary.

But bear in mind that the bad hire is a monkey wrench that continues to disrupt the works as long as the troublesome employee holds their position in an otherwise lean, lucrative, and productive operation. That $750,000 may just be the first sum in a long list of less tangible and harder to quantify business costs, especially in the highly specialized mining industry where rigorous safety training and comprehensive onboarding processes are mandatory.

hiring right employees mining industry

The Importance of Hiring the Right Candidates the First Time

According to an article at Chief Executive, "The Real Cost Of A Bad Hire", a management-level employee making a yearly salary of $68,000 who must be terminated within 2.5 years of hiring would end up costing the organization $800,000, not including the cost of more recruiting and hiring a replacement.

In fact, keeping a bad hire on the job adds to losses including:

  • disruption and damage to workforce morale when competent employees are constantly taking up the slack
  • significant reduction in productivity
  • customer satisfaction declines
  • work quality and business reputation suffers

As the article at Chief Executive points out these negative effects of a bad hire can easily cost the company more money than the immediate recruiting costs involved in replacing the bad hire. When a bad hire is identified it's time to take immediate action. Whether relocating the troublesome employee to a more suitable position more aligned with their particular skills or terminating the bad hire altogether, it's important to resolve the situation quickly to mitigate the negative impact on company morale and the bottom line. 

65% of mine managers in Australia admit to having hired "new employees who fail to meet expectations", but they're not alone. According to a Brandon Hall Group study and Glassdoor; 69% of American companies made bad hiring decisions, the result of "flawed interview processes". 22% blamed bad hires on "insufficient talent intelligence prior to recruiting." So how can companies avoid the pitfalls of the bad hire?

According to author Brian Weed at Chief Executive:

"Firms that specialize in certain industries, candidates with particular skills, or seeking specific roles in a company can streamline recruiting and hiring while providing top-quality talent who have been pre-screened for needs of the company and role."

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Recruiting Support and Expertise at Resource Erectors

At Resource Erectors, we are that firm. We bring 20 years of specialized recruiting experience to the table to help North America's industry-leading companies hire the best-qualified professional candidates and avoid the disruptions and expenses of "the bad hire".

We maintain relationships with the top candidates seeking to advance their professional careers in the mining and minerals processing industry, as well as the manufacturing, civil construction, and engineering sectors.

We also provide recruiting expertise for rigorous candidate screening with professional support throughout the entire interview process to eliminate the risks of a "bad hire". That's why over 80% of employees placed by Resource Erectors are still contributing to the success of their companies 5 years later.

When you're ready to prioritize recruiting to build your professional dream please don't hesitate to contact us today for a free consultation. 

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About Author

Dan Duszynski
Dan Duszynski

CEO and President of Resource Erectors, Inc.. A search and recruitment firm serving the mining and mineral processing, engineering, and civil construction industries of North America.

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