The Real Cost of a Bad Hire

The Real Cost of a Bad Hire

When it comes to costly workplace mistakes, few carry as hefty a price tag as making a wrong hire. According to a recent Entrepreneur article, half of hiring and HR managers estimate that bad hires have cost their companies, “thousands of dollars.” If you think that is scary, Zappos CEO Tony Hsieh once estimated that bad hires had cost his company, “well over $100 million.”

The case for hiring right

study by the Society for Human Resources Management (SHRM), noted that a bad hire also decreases the morale and productivity of the team on top of financial costs.  Make too many bad hires and your workforce will doubt your ability to hire the right people to get the job done.

Obviously, the best solution is to not make a bad hire in the first place. And while there is no 100% foolproof way to prevent an occasional bad hire, there are ways to greatly reduce the risks of hiring a dud while increasing your chances of choosing a rockstar for the role.

Understand your needs

Experts say bad hires are often the result of the job description not matching the job criteria.  The result: a new hire joins the organization and it quickly becomes clear that he or she does not possess the skill-set to effectively execute the job. The key is to create a job description that is laser-focused on the actual skills and competencies required for the job.

Take the time to:

  • List the 5 major responsibilities of the vacant position —those areas in which the employee will be spending the majority of their time every day as well as the critical skills necessary to perform each responsibility.
  • Determine what educational background is necessary to do the job and what educational background is desirable. Be sure that you differentiate between the two. Use education as an indication of the candidate’s determination and ability to learn, but don’t rely on it too heavily.
  • Decide the depth of experience you need. Give yourself a range, but be prepared to consider candidates that look promising and are also outside of that range. Make sure candidates have the skills and experience to do the job well.

Slow down & evaluate ability first

In this tight candidate-driven market, you will need to move candidates quickly through your hiring process to prevent losing them. However, resist the urge to make a snap decision. Hiring experts say that rushing to judgment is a top reason employers make bad hires. Explain to everyone involved the need to follow the process and fully vet top candidates. A little more time up front is nothing compared to the time and money lost with a dud hire.

Cover the Basics

At the heart of every interview is an honest reading of employment history.  Ask the candidate questions in the interview that enables them to open up and show insight into how they have handled situations at their past jobs.  Here are a few examples:

  • What were the three most important responsibilities in your previous job(s)? What special skills or knowledge did you need to perform these duties?
  • How would your last supervisor describe you?
  • What was the most important project you worked on at that job?
  • What are your long-term goals and how will this job help you reach them?
  • How would your co-workers describe you?

In addition to interviewing the candidate, conduct skill testing to further determine their ability. These tests can provide hiring managers with objective evaluations on a wide range of critical skill sets.  We require skills testing in each core area before a candidate is considered for a position.  (Remember, we offer free skill testing if you would like to take advantage of that service.)

Screen Thoroughly

Verify the work references – are the dates of employment close to what their resume states and did they perform the job listed on their resume at that job?  Sounds obvious, but many applicants will exaggerate their responsibilities from prior positions.  When this happens your company pays the price by hiring someone without the skillset to perform the job.

Perform a background check that includes both sexual offenses and criminal searches.  If the person will be driving on the job, then check their driving record before hiring them for such a position.  Other screening methods; drug testing, physical, etc. can be added once you narrow your search.

Make the Call

Performing your due diligence throughout the hiring process improves your knowledge level about the candidates.  It is easier to weed out candidates that are not a good fit due to lack of skills, work experience or criminal history – thus leaving you with the best candidates from which to choose.

It Takes Time

Hiring the right candidate takes time when done properly – recruiting, interviewing, testing and screening.  If time is something you don’t have, Career Personnel can provide you with pre-screened and qualified candidates for your open positions.  Call us today at (903) 236-4243 for more information on how we can partner with you to improve your hiring process.

Career Personnel is a professional recruiting and staffing agency located in Longview.
Keep up with Career Personnel online at 
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