What Does A Bad Hire Cost Your Accounting Firm
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We have all hired or worked with that nightmare accountant. Within the first few hours you think it’s a bad call. Within a week you know it is. They might seem to lack any true comprehension of what accounting is all about, constantly get the same things wrong, don’t know basic Dr’s and Cr’s and they spend hours going in circles on an issue asking your whole team the same questions (or even worse not asking anyone!). You can’t trust anything they do and someone on the team has to rework everything.
What is the cost of this bad hire to your accounting or bookkeeping firm? There are lots of figures offered up – 100% of salary, 140% of salary. As good accountants we say “how did they work that out”? When you dig in these calculations are often quite generic, and not specifically related to the reality of an accounting practice. We decided to do some research on this, but also added in 25+ years of experience in hiring accounting staff – and how the pain plays out when you get it wrong.
Our Bad Hire Calculator goes through the cost of hiring, training and ultimately managing out/firing that staff member who just doesn’t have what you need. In an accounting firm this, of course, is not just cash costs, but loss of production and ultimately profit, as well as chewing up time and mental energy of those trying to deal with the problem. We’ve started you off with an initial assessment of the costs to an accounting firm, but you can edit the costs that you think better represent the cost to YOUR firm. Email the results to yourself as a reminder and a talking point with your partners/directors.
People always bring variability but using good processes in selection – and in particular strong interviewing, testing, and reference checking can reduce the likelihood and risk of expensive mistakes.
As one of our customers wrote some time ago “They did badly in the testing. I hired them anyway. They were as bad as the testing suggested, and I had to fire them. Now in the market again for a new accountant ☹”.
You can find the Bad Hire Calculator here
About the Authors
Giles Pearson FCA was a PwC Partner for 18 years before jointly setting up Accountests.
Steve Evans has a whole career dedicated to candidate testing and assessment before setting up Accountests.
Accountests deliver the world’s only online suite of annually updated technical knowledge tests designed by accountants for accountants and bookkeepers.