PrincePerelson & Associates

How to Avoid the High Cost of a Bad Hiring Decision

The recruitment process is all about getting to know one another. Through a series of written, verbal, and in-person interactions, hiring managers learn all they can about potential candidates. They devote hours to reviewing resumes, conversing with candidates, performing background checks, and checking references. Why dedicate all this time and effort to the hiring process? Because a positive outcome is essential.

One does not have to be a seasoned recruitment professional to understand the potential implications of introducing an ill-fitting cog into your well-oiled machine. Social interactions with others demonstrate the profound impact that a single person can have on the dynamics of a group, including the things they do, what they say, and the choices they make.

Despite our best efforts, poor hiring decisions happen. However, understanding how and why these decisions occur can help you to hedge your bets against a bad hire.

What is the cost of a bad hire?

If you ask Google, you will discover that many business experts have the same question. Yet, the answers vary because it is challenging, if not impossible, to quantify the cost. What is clear, and what everyone can agree on, is the fact that the financial toll is significant, especially when you are hiring for higher-level positions. Not only do you lose your investment of time and effort hiring a person who is not a good fit for the position, but your team suffers losses in productivity as they struggle to complete projects and meet deadlines.

In addition to financial costs, there are other losses to consider when determining the cost of a bad hire.

1. Reputational Losses – Unengaged or less capable hires may not provide the same high level of customer service your clients expect. Poor experiences with one employee can tarnish a client’s opinion of the business, erasing years of relationship building. These interactions may result in unfavorable reviews that hinder business growth in the future.

If you decide to terminate an employee and the relationship sours, it could also leave your former employee with a bad opinion of the organization. Sharing these views on Glassdoor or other online forums could further injure your reputation as a desirable employer.

2. Decreased Productivity – Teams perform best when every person completes their task to the best of their ability. Working toward and achieving common goals can be motivating to all. Unfortunately, it only takes one member out of sync with the others to spoil the positive work environment. One team member’s lack of achievement will slow and bottleneck progress. Left unchecked, these attitudes and behaviors may spread to other team members, leading to a loss in productivity.

3. Wasted Time – Discovering your new hire is not a good fit for the organization can be alarming and may instantly throw you into disaster recovery mode. You may doubt your instincts, doubling down on your hiring decision and investing time and effort into rectifying the situation and converting the new employee into an asset. Perhaps with a bit more direction and coaching, they will rise to the occasion. Unfortunately, this type of response to a bad hire often delays the inevitable parting of ways that should happen swiftly.

4. Repeating the Past – Investing in recruiting the best person for every position is wise. However, even your best efforts may lead to less-than-ideal results. Repeating the process after a bad hire doubles your investment without increasing your returns. A Salt Lake City recruiting firm can help you avoid the hassle of a duplicate search by providing access to their network of skilled and experienced individuals. They can assist you in identifying those whose skill sets, and culture will mesh well with your team and keep you on track to meet your year-end goals.

How can companies avoid bad hiring decisions?

No company has a perfect track record for hiring the best candidate every time. However, there are steps you can take as an employer to minimize your chances of making a costly mistake.

  1. Check the candidate’s references. Don’t make a hiring decision based entirely on a few short interviews with a candidate. Talk to their former employers, coworkers, and other references. These individuals can help confirm or dispel any doubts you may have about hiring the candidate.
  2. Look for telltale signs of a bad hire. The same person interviewing with you will be the one showing up for the job. Watch for signs they may not be the hardworking team player you wanted. These signs include showing up late, displaying a negative attitude or complaining, failing to show respect, or lacking proficiency in areas they claimed on their resume.
  3. Ask a coworker for a second opinion. If a candidate doesn’t feel right to you despite their stellar interviewing skills, bring in an expert. Someone who works in the department where this candidate would work is ideally suited to help evaluate the knowledge and skills they possess. They are also a great sounding board for your concerns.
  4. Clearly communicate job expectations. Beginning an employment contract with clear expectations allows for an open and honest evaluation of the employee’s performance in the coming months. If they fail to meet mutually agreed-upon expectations, the termination that follows will not be a surprise to anyone involved. Neither will it be a challenging decision for you to make.
  5. Choose a temporary relationship. Hiring an employee for a short trial period allows both the employee and employer to try the position on for size before making a full investment and commitment. This arrangement may not work well for all situations or organizations. However, temporary jobs can be a valuable tool in finding the best individual for the position.

Recruiting for Success

Recruiting highly skilled individuals to help your organization be successful is not an exact science. It is a multi-step process aimed at creating the perfect match between the organization and the individual. Performing it skillfully requires a blend of the right tools and years of experience evaluating applicants for open positions like the ones in your organization. To increase your ability to attract and retain top talent, consider working with a staffing agency with experience hiring in your industry. They can help you with every step of the recruiting process, from identifying the necessary skills to interviewing candidates and negotiating salaries.