Hiring the wrong person is a costly and aggravating mistake – yet it is something that happens far too often. In fact, according to CareerBuilder, 74% of employers admit that they have hired the wrong person for a position before. With poor hiring being such a common mistake that businesses make, it is important to know how the cost of hiring the wrong person can impact a company and how can it be prevented.
Forbes emphasizes that, based on research from the U.S Department of Labor, a bad hire can cost up to 30%of an employee’s first-year earnings. While the monetary loss can be significant, money isn’t the only thing that a bad hire can cost a company.
The Cost of Hiring the Wrong Person on Morale and Company Culture
One of the most substantial ways that a bad hire can cost a company is the impact he or she can have on the overall morale and culture of a company. Hiring mistakes typically reflect poorly on those involved in the decision, which can result in a decrease in those people’s drive and confidence. Moreover, the desire to not be seen as having made a poor hiring decision typically leads these managers to keep bad hires on longer than they should.
Negative attitudes have a major impact on a company’s overall morale. If a bad hire is constantly speaking negatively about his or her work and making other employees unhappy, the culture of the company will be impacted in a negative way. In fact, a single employee can often have the power to cause other employees to lose their motivation and work ethic.
In addition to affecting other employees, a bad hire can represent your business inappropriately and leave a bad taste in other in potential partners’ and customers’ mouths. When you have an employee who cannot perform his or her job to the standards you need, it reflects back on your company as a whole.
The Cost of Hiring the Wrong Person on Company Productivity
A bad hire can hinder the overall productivity of your company as well. Hiring someone with an inability to work well with your other employees or who performs poorly will have many detrimental effects. If one person is performing poorly, the rest of the team will need to put in more effort to pick up their slack, causing them to become frustrated with and distracted by the person underperforming.
Forbes notes that when a disengaged hire doesn’t pull his or her weight, good employees have the potential to get burned out making up for it.
Renewing the search for a new hire to replace the bad one that was hastily brought onboard will also impact a company’s productivity, but significantly less so when considered over the long-term.
While time and effort that could be spent working on other things will instead have to be spent on searching for and hiring a new person, the cost you put in to replace them will significantly outweigh the cost to keep them. This is especially true when you factor in the previously mentioned impact on morale that could cause your strong employees to start looking for opportunities outside of your company and away from the poorly performing hire.
Let’s Talk About the Money
The loss of team morale and company productivity obviously result in lost revenue. But how much are those monetary losses? CareerBuilder reports that companies lost an average of $14,900 on every bad hire in 2016. With employee annual salaries and employee benefits, the cost of hiring the wrong person and the risk of losing your strong employees in the process significantly adds up.
Preventing the Problem
With all of this being said, the real question is what can be done to prevent all of these costly impacts from occurring? What measures can companies take to weed out candidates that perform well in an interview, but ultimately aren’t the right fit? Here are some tips that will help:
- Pay attention to red flags: When something stands out as unusual or off-putting, don’t dismiss your instincts. Note any red flags you come across during the hiring process. Small ones often come up that hiring managers choose to overlook because they usually aren’t deal-breakers on their own, but these red flags can add up to a poor hire.
- Use references to your advantage: Pay special attention to references, as they can help you gather valuable insight about a candidate. If they have not directly worked with the candidate previously, then they are likely not going to be able to accurately tell you much about how the candidate is in a work setting.
- Listen to others: Take multiple perspectives into account from throughout the company when deciding whether or not to hire someone. Anyone who has interacted with the candidate during the interview process might be able to give you additional insight.
- Set clear expectations: Make sure potential candidates are well aware of the expectations you have for them before you hire them. If a certain level of expertise is absolutely necessary to the role, let them know how essential it is and assess how capable they are in that particular skillset before you hire them by asking
- Don’t rush into it: Although an open position can be stressful and result in more work for your other employees, don’t hire someone out of urgency. Offers should only be extended to the right fit—not the “right now” fit.
At ADAPTURE, we’re here to make sure your company hires the right candidate for the position every time. We’ve cultivated an extensive network of skilled active and passive candidates with the expertise organizations are looking for. Whether you’re looking for your next IT Director or a new Senior Business Analyst, ADAPTURE connects you with the right people at the right time.
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The majority of top candidates are already employed. So how do you reach those passive candidates to fill your open roles? Contact an ADAPTURE Talent Manager to get started.