The True Cost of Product Recalls     

by Michael Allen

"Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong" ~ Donald Porter

For any business out there, brand reputation has become paramount.

Manufacturers can succeed or fail at the hands of a customer’s perception of their product. This rings true with a multi-billion pound blue chip organization or a family owned start up.

This is also notably present when businesses manufacture products within the healthcare sector, where products can literally mean life or death to the patient, and the consequences of a malfunctioning product can result in a fatal outcome for the profit sheet of a business.

Surprisingly the number of product recalls is increasing every decade. From 2002 to 2012 the number of recalls, due to defective medical devices nearly doubled. Perhaps a more unnerving figure was the sharp increase in Class 1 device recalls – cases where the malfunctioning product caused a reasonable probability of death – the reason for this, can be put down to the complexity of medical devices and the fierce competitiveness between businesses to rush their products into the market.

The financial costs of recalls for medical device businesses are huge and cost the industry on average between $2.5bn and $5bn per year. Major recalls have been as high as $600m for some manufacturers, and in the past 10 years there was an average of one major recall every year, resulting in 13% stock price drop across the industry.

Recruitment ties in with many of these factors and can, in the same light, enhance your brand reputation – if done in the right way. The method of having one recruitment partner that understands your business, is fully briefed on the requirement and is exclusively engaged to you, prevents inconsistent or mixed messages being delivered into the market. Candidates don’t appreciate 15 calls from 15 different recruiters about the same role and this will eventually damage your brand. At RMG we believe in enhancing our clients brand and partnering them outstanding talent who add financial value to their business.

If you’re conscious of your brand reputation, to discuss your future recruitment strategy or current recruitment issues please give me a call or drop me an email.

Similar Articles...