We’ve all done it – opted for the cheaper option because the idea of spending a certain amount at the time was off-putting.
“What’s the point of spending $$$ on a brand-new car when I can buy a cheap old used one and have it all paid off?”
“If I wait until the holiday sales, I can get a television for so much less”
The examples are endless, but the aesthetic of “getting a bargain” or making the “fiscally conservative” choice remains the pride of many individuals. The issue with this ideology is that not all of these bargains are actually saving you money in the long run. The cheap car you were so proud of not having to take out a loan for costs a few thousand a year to continuously replace the failing parts, eventually catching up to a nicer car you could have just purchased from the start and enjoyed.
That TV you got on sale was on sale for Black Friday because the failure rates were high for that model and the performance below average. You’ll likely have to purchase another in a couple years when it fails.
There’s almost always a catch.
Low cost, financially efficient choices do exist out there, but there’s a skill in knowing which is actually a bargain, and which amounts to a cheaper down-payment, with recurring costs that eventually catch up to the premium item or service.
This translates to the retail management and recruitment space: spending less money on the hiring process and opting for the cheaper massively staffed recruitment services will save you money on the initial cost, but what’s the long-term look like? Mis-hiring has massive financial consequences – even just a sales rep mis-hire can tank profits – a management mis-hire can close stores.
(Image from Dr. Bradford Smart’s Avoid Costly Mis-Hires)
These costs pale in comparison to the cost of properly recruiting from a boutique recruitment agency such as The Bowerman Group the first time around. Spending just 5-10% more at the gate can prevent these massive costs from incurring at all. While being a cost-effective business is the name of the game, bargain hunting for your employees is not a smart gamble.