The Total Cost Of Making A Bad Hire

If you want to increase your net profit margin, learning how to hire and retain a talent is the single most profitable thing you can learn how to do. The U.S. department of labor has indicated that when you need to hire someone, you lose roughly 1 to 2% of your gross income per month for however long it takes you to develop and hire that person. So on average, in the field of physical therapy, it takes roughly 6, 6 months for the average physical therapy practice to hire someone after they start looking. So I want you to think about that loss over six months. The tens of thousands of dollars that gets lost when somebody is needed, and it just takes time to bring them on. To make it even worse, there is a huge cost when we make that hire and they don't turn out to be a good fit. The U.S. department of labor has also put some numbers and research into this and has found that it costs accompany roughly 30% of that new hire's salary. When they're not a good hire, that's a huge loss. To put it in perspective, if you hire a physical therapist and you pay them $70,000, that's a $21,000 loss to your company. And lastly, of course, there's the emotional impact of not hiring or making a bad hire. As PT owners, I will tell you it is the single most stressful thing that we can go through, apart from like a Medicare audit. And even then, maybe that's debatable because when we make a bad hire, all of those crucial conversations, all of the drama, all of the pain that goes into identifying the individual, helping them progress, only to have them fail and leave is one of the most draining experiences that we can go through as owners. And so that is why it is so important to learn how to recruit and retain a talent. This may not be all there is in terms of cost. What did I miss? I'd love to hear from you. What is another way that we lose money or energy when we make a bad hire or when we aren't able to hire a physical therapist? Thank you for watching. Until next time.