A Bad Hire Costs $25k-$50k: Avoid the Risks of a Bad Hire with 4 Simple Tips
Posted by Guest Author on April 17, 2013 in Business Management, Hiring [ 0 Comments ]
A bad hire can be an extremely expensive mistake. A recent CareerBuilder study estimated that for 41% of businesses, a poor hire costs upwards of $25,000 (Tweet this stat!), and for 24% of businesses, that price tag is over $50,000.
This only considers quantifiable expenses like lost sales and the need to hire and train a replacement – it doesn’t even take into account less definable damages like blows to employee morale and poor customer service.
So what can your company do to minimize the chance of hiring an inappropriate or inept employee?
1. Never Rush the Hiring Process
Racing to fill positions quickly is the number one reason companies hire poor employees. In the same CareerBuilder study cited above, a full 43% of businesses blamed haste for their biggest hiring blunders.
If a position has to sit empty while you sift through resumes, interview candidates, and run background checks, then so be it. A few weeks of short-handedness are vastly preferable to the months of drama that can come from a bad hire. In an emergency, you can always use a temp agency to take up the slack while you find an outstanding candidate.
2. Profile Your Most Successful Employees
Meet with a few of your most well adjusted employees to identify the characteristics that have made them so successful at your company. Find out where your best employees came from and try to get more recruits from the same place.
For example, BYU is a hotspot for recruitment because, generally speaking, LDS graduates are ethical, family-oriented, and hardworking. Once a company hires one LDS employee, they tend to want more, and they come to BYU to find them. If you know a particular characteristic or skillset is successful at your company, look for more of the same.
3. Check References Scrupulously
It seems so obvious, but a whopping 9% of bad hires are the result of a failure to check references. You want to believe people are honest, but unfortunately a disturbing percentage of resumes contain embellishments, exaggerations, and outright lies (53%, according to The Society of Human Resource Managers.)
Before hiring for any position, be sure to check multiple references including former places of employment. Ask specific questions to confirm positions, duties, dates of employment, plus education and skills.
4. Use Hiring Assessments
Hiring assessments take some of the human bias out of job interviews. A hiring assessment can be customized to fit the needs of your particular business or position, testing for practical skillsets, personal characteristics, or ethics and values.
Cultural fit assessments are a recent trend in hiring. A cultural fit assessment determines if a candidate will mesh well in your corporate culture. It can be a useful tool to determine if potential employees will work well with their peers and feel comfortable with corporate customs and objectives.
Hiring is one of the most important aspects of business management. Just like you’d never invite a stranger into your home, you should never bring a new employee into your carefully cultivated work environment without thoroughly examining their personality, skills, and intentions.
Bio: Ryan Kohler is an HR Consultant and the CEO of Job Match, LLC – which provides hiring & applicant tracking software for HR professionals.