That Bad Hire Could Cost You More than $25,000

Too many options aren’t necessarily better than too few, especially in terms of potential employees. It’s a common occurrence in today’s economy, where there are an estimated 3.4 unemployed people for every job and hiring managers regularly receive dozens—if not hundreds—of resumes for open positions. In fact, all these options can make it even more difficult to determine the best candidate.

Unfortunately, choosing the wrong professional can cost your company more than you may imagine. A recent study by CareerBuilder found that 69 percent of employers dealt with a bad hire in 2012. Of them, 41 percent estimated the poor decision cost their business more than $25,000. Twenty-four percent put their costs at over $50,000.

Bad hires negatively impact your business in many ways. According to the survey, reduced productivity and lost recruiting and training time are the most common effects, each cited by 39 percent of responding employers. Additional recruiting and training costs was next with 35 percent, while 33 percent of respondents mentioned negative impact on employee morale. Other costs include negative client impact (19 percent), reduced sales (11 percent) and legal issues (9 percent).

How do bad hires cause all this damage? Sixty-seven percent of employers surveyed cited poor quality work, followed by 60 percent who said their bad hires didn’t work well with others. Another 59 percent of employers blamed negative attitudes, while 54 percent mentioned attendance problems and 44 percent named problems with customers. Finally, 44 percent also found missed deadlines to be an issue.

Though bad hires can, and do, happen to good businesses, employers can avoid most of them if they slow down and take their time in hiring. Forty-three percent of the employers surveyed by CareerBuilder blamed their bad hires on rushing to fill open positions. Another 22 percent blamed the lack of sufficient information on candidates, while 10 percent said it was too difficult to go through all the applications and 9 percent didn’t bother to check references before hiring.

Here are a few other ways you can reduce your chances of making poor hiring decisions:

• Have a clear picture of what the position requires before advertising the job.
• Consider an Applicant Tracking System (ATS) to help you manage resume and application submissions.
• Consider cultural fit as well as hard and soft skills.
• Involve more than one manager in interviews to increase objectivity.
• Never skip background or reference checks.
• Verify all professional and educational info.

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