High Cost of Low Employee Pay: Avoid These 3 Employee Hiring Mistakes

Is your approach to the hiring process quietly costing you money? As a childcare business owner, you want to hire employees who add to your bottom line — not drag it down. In this guide, we’ll dig into three common childcare hiring mistakes that come at a high cost. Read on so you can avoid them.

Ironically, some of the most expensive hiring missteps start as attempts to save money. The old adage “you get what you pay for” rings especially true with new hires. Here are the most common childcare hiring mistakes — and what they actually cost you.

1. Hiring a Low-Quality Candidate for a Low Wage

Finding a candidate who’ll work for less feels like a win. However, that “win” often disappears fast. A low-quality hire can quietly cost your childcare business in three big ways:

• Reduced productivity – A weak hire may look great on paper but underperform on the job. From poor execution to weak work ethic, the wrong person slows down the whole team.
• High cost of retention – Keeping a low-quality hire on the payroll often costs more than expected. Onboarding, training, and re-training are time-consuming and expensive — especially when the employee contributes little.
• Low motivation and morale – A weak hire who lacks drive can drag the team down. As a result, your stronger staff may grow frustrated, disengaged, or burned out.

The money you “save” on a cheap hire usually evaporates within months. According to Gallup, disengaged employees cost U.S. businesses hundreds of billions in lost productivity each year. Hiring the right candidate at a competitive wage is almost always the better investment.

2. Hiring the Right Candidate and Losing Them

Adding the right employee to your daycare team is a huge asset — as long as you can keep them. Employee retention is a critical part of running a profitable company. However, employers who watch their best people walk out the door have a costly problem.

How much does turnover really cost?

The Society for Human Resource Management (SHRM) estimates the cost of replacing a salaried employee at roughly six to nine months of that employee’s wages. For mid- and higher-level positions, the cost climbs even higher.

Meanwhile, BLS JOLTS data shows turnover remains elevated across service industries — childcare included. Between hiring, onboarding, training, and the time it takes a new hire to reach full productivity, replacing the same role over and over is a serious drain.

Boosting retention is the smarter play. Check out these ten reasons great employees stay and pick a few to work on. For more on keeping happy staff, read our daycare staffing tips for reducing turnover.

3. Making Poor Decisions During Your Job Search

Your best plans can fall apart when you make weak choices during the job search. For example, here’s how employers commonly set themselves up to hire the wrong person:

• Hiring out of desperation – Rushing the decision because you’re desperate to fill the role almost always leads to the wrong hire.
• Writing vague job descriptions – Fuzzy language and unclear duties pull in a weak applicant pool. As a result, the candidate you pick is rarely the candidate you needed.
• Leaning on expensive recruiter sites – These platforms can cost a fortune with zero guarantee of finding the right person.
• Ignoring company culture – A candidate may look perfect on paper. However, the wrong personality or attitude makes them the wrong hire.
• Skipping reference checks – References are a goldmine. Skipping the call costs you information you’ll wish you’d had — usually after it’s too late.

Remember, a few best hiring practices go a long way toward saving money on the right candidate. In addition, a strong stand-out job ad attracts a much better applicant pool from the start. The U.S. Small Business Administration also offers free guidance on building a stronger hiring process.

The Real Cost of Childcare Hiring Mistakes for Your Daycare

The three childcare hiring mistakes above can have far-reaching effects on any business. However, the expense of hiring the wrong employee is only part of the picture. The wrong hire can hurt your revenue, your team — and the families you serve.

Families who leave your care because of a bad employee represent a loss of revenue, relationships, and reputation. As a result, owners in this spot often wish they’d invested more in the hiring process from the start. The frustration and heartache simply aren’t worth the short-term savings.

Finally, we hope this guide helps you spot the common childcare hiring mistakes before they cost you. Setting up your childcare business for financial success starts with a solid plan — and Honest Buck Accounting is here to help. Schedule a discovery call to talk through your childcare business accounting needs.