By Meghan Ritchie, Owner – Trustal Recruiting
Building a strong team takes more than finding the right hire. Many organizations suffer loss from turnover. Why? Because the typical small to mid-sized business treats hiring like a transactional checkbox instead of a strategic, end-to-end process.
Companies spend thousands on job boards and recruiters, only to scramble later when the new hire doesn’t work out. The instinct to “post the ad, see who shows up and hire a warm body” is common, but it’s also costly — and avoidable.
The real beginning of hiring isn’t the ad or job posting. It’s the work done long before the ad goes live: defining the role, clarifying outcomes, planning onboarding and training, and putting the support systems in place so the new hire can succeed and their proficiency develops as quickly as possible. When business owners and hiring managers skip these steps and “wing it,” they create the very conditions that lead to turnover and a vicious, expensive cycle of replace-and-repeat.
What is the cost of skipping preparation?
There are direct and hidden costs that multiply quickly in smaller organizations. It often costs far more than just the departing employee’s paychecks.
Typical estimates: one turnover usually costs between 30 percent and 200 percent of that position’s annual salary depending on level, role complexity, and how well the company manages hiring/onboarding. This percentage comes from the following:
- Recruiting and hiring costs: advertising, recruiter fees, background checks, and the hours owners and/or managers spend interviewing.
- Onboarding and training wasted: materials, trainer time, and other formal or informal ramp-up efforts that produce no long-term return.
- Lost productivity: the new hire’s slow start plus the lost output of colleagues covering gaps.
- Manager and leadership time: frequent coaching, performance management, termination processing, and re-hiring efforts pull leaders off strategic work.
- Lost continuity: disrupted projects, slower cycle times, and potential loss of a job or revenue as a result.
- Customer impact: service lapses, angry clients, missed future sales and referrals.
- Lower team morale and engagement: persistent turnover drains motivation and increases mistakes.
- Increased errors and quality issues: mis-hires often create rework and corrective costs.
- Opportunity cost: stalled initiatives and missed growth because everyone’s “firefighting.”
- Severance, termination, and legal costs: payouts, unemployment filings, and possible disputes.
- Benefits and payroll overhead wasted: paid time off, employer taxes, and benefits paid during a short tenure.
- Rehiring and replacement expenses: repeating sourcing, interviewing, and onboarding and repeating the ramp-up time.
Put bluntly, one bad hire can cost a company months — sometimes a year — of that role’s salary in total losses. For a small business, that’s often the difference between steady growth and remaining flat year over year — or even worse, have a year that’s down.
Areas to watch and improve:
- Avoid treating the job ad as the start of hiring instead of the final piece of preparation.
- Define clearly the success criteria for the role (what “good” looks like at 30/60/90 days).
- Create a structured onboarding and training plan. Don’t assume new hires will “figure it out.”
- Hire to meet business outcomes vs. people to do tasks. Otherwise, people get bored, confused, or misaligned; and then they quit or worse, “quit and stay.”
- Hire those who are a culture fit. Know what values and character traits that you are seeking in new hires/potential team members — and hire to this.
- Pay attention to owner/manager readiness. Are they prepared to train? (This is a huge predictor of retention.)
When you treat recruiting strategically, it becomes a growth lever instead of a recurring expense. Companies can transform hiring from a drain into a differentiator simply by committing to that end-to-end discipline. It’s a lot easier to do than you think; it just takes time and focusing on it. The ROI is tremendous. Trustal Recruiting can help if you need insights or assistance with any of these disciplines.
Meghan Ritchie is the founder of Trustal Recruiting, a firm specializing in recruiting services for home services companies like electrical, HVAC, roofing, plumbing, and other trades. The company collaborates deeply with its clients to develop their teams over time. Learn more at trustalrecruiting.com.
