According to a Career Builder Survey, 40% of employers reported that a bad hiring decision can cost companies $25,000 and, 25% of those polled said the cost can be as high as $50,000! More than 68% of employers surveyed stated that they had made a bad hiring decision in the prior year. Poor hiring decisions can affect productivity, morale and work quality.
“It can be hard to predict how a new hire will fit with the organization or perform in their new role. Even though mistakes happen that are beyond the hiring manager’s control, the more thoroughly the candidates are vetted, the less likely they will be a poor match,” said Rosemary Haefner, vice president of human resources at CareerBuilder. “It’s important that candidates meet as many people in the department as possible – especially if they will work closely together. Also, if candidates say they are proficient in a skill critical to the job, they should provide ample evidence that their experience meets the organization’s needs.”
The cost of a bad hire shows up in productivity, training of the new employee and team morale. Poor hires often display negativity in the workplace, provide poor quality of work and often don’t get along with other employees.
Organizations often hire quickly out of the critical need to fill a vacant position - which can lead to hiring mistakes. The pressure of filling a spot to bridge a productivity gap can overshadow the importance of good hiring decisions. There is a saying – hire slow, fire fast – there is a lot of wisdom in these words.
4 Things to Help Avoid a Bad Hire
1. Structured Hiring Process
The hiring process should be structured, systematic and thorough. Every job applicant should be required to complete all necessary paperwork and testing. This should include competency and skill assessments. Regardless of the job or the industry, there should be basic core competencies to demonstrate the ability to perform job duties. Job candidates that don’t possess those critical skill sets should be passed on - regardless of how desperate you are to fill a position, or who they know in the organization.
The interview process is critical to making good hiring decisions. Job candidates should be interviewed by several different people in the organization as well as members of the team they will be working with. Coworkers should be allowed to participate in the interview, which ultimately supports a smooth onboarding process. Taking the necessary time to prepare for the interview can help to ensure an effective screening conversation.
Spend ample time checking references on all job candidates. A lot of employers will only verify employment and income so ask for personal references and talk to each and every one to learn as much as you can about the job candidate. Getting a perspective on how someone interacts with other people can go a long way in avoiding those personality clashes that lead to workplace conflict or even worse a bad customer experience.
4. Disregard Relationships
This may be the most difficult one to do but it is important to not allow relationships (political) to influence hiring decisions. Company policy should dictate that if someone meets all of the hiring criteria they can be considered for the job and not because they are related to someone or have friends in high places.
Hiring the right employees is an essential part of effective business management. Taking the time to thoroughly screen and test job applicants is the best defense against bad hiring decisions. While no organization will ever get hiring right 100% of the time, taking these necessary steps will go a long way in keeping the percentage high!
Patricia Lotich is the founder of The Thriving Small Business and a small business coach. Patricia helps business owners solve problems and develop strategy and goals to achieve objectives. Schedule a free 30 minute phone consultation with Patricia to see how Thriving Small Business can help your organization.