When it comes to costly workplace mistakes, few carry as hefty a price tag as making a bad hire.
According to recent CareerBuilder survey, consisting of more than 6,000 hiring managers and human resource professionals worldwide, more than half of employers in each of the 10 largest world economies have felt the affects of a bad hire.
The case for hiring right
Another study by the Society for Human Resources Management (SHRM), found that a hiring mistake could cost up to five times the bad hire’s annual salary. In addition, the higher the person’s position — and the longer they remain in that position — the more it will cost to replace him or her.
The CareerBuilder survey shows that nearly 66% of U.S. employers were impacted negatively by bad hires, in addition they also found these negative affects due to either making a rash hiring decision or out of :
- 36% lost productivity
- 32% showed a negative impacts on employee morale
- 18% negative impact on client relations
- 10% lost sales
- 31% impacted by the cost needed to train another worker after the bad hire
Putting these numbers all together, the U.S. was one of the highest impacted countries in the survey. It’s estimated that some companies could lose up to $50,000 by making a single bad hire.
Of course, those are just the financial implications. There’s also the significant energy drain and emotional toll of dealing with a bad hire – not to mention the potential damage to the hiring manager’s reputation within the organization.
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 significantly reduce the risks of hiring a dud — and increase your chances of choosing a star performer for the role.
Understand your needs
First, you need to develop a needs analysis for the particular job you are trying to fill:
- List the five major responsibilities of the vacant position —those areas in which the employee will be spending the majority of time every day.
- List the critical skills or special knowledge necessary to perform each responsibility.
- Review your performance requirements and separate those that you “must have” from those that would be “nice to have.”
- 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 too heavily on academic criteria for your ultimate decision making.
- Decide what depth of experience you need. Give yourself a range, but be prepared to consider promising candidates from outside that range.
- Make sure candidates have the skills and experience to do the job well.
- Ascertain if the candidates are willing to do what it takes to succeed.
- Be comfortable that you can manage them.
Don’t go with your gut
Following your instincts can often pay off in business – but not so much when it comes to hiring. Landing a good hire is hard work and basing a decision solely on someone who interviews well or “feels like a good fit” can lead to not doing enough research into the candidate’s skills, experience and references. Writing recently in the Huffington Post, legendary former General Electric CEO Jack Welch, who once penned a book titled “Straight From the Gut,” emphasized the need to take emotion and gut feelings out of the hiring process and do the proper due diligence to find the best candidate.
Slow down and evaluate ability first
The work is piling up. Your boss is pushing you to make a hire. Candidates are filling your voicemail with “checking on the status” message. Still, 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.
- What were the three most important responsibilities in your previous job?
- What special skills or knowledge did you need to perform these duties?
- What achievement are you most proud of?
- What was the most important project you worked on at that job?
- What have you learned from the jobs you have held?
- In what way has your job prepared you to take on greater responsibilities?
- What are your long-term goals and how will this job help you reach them?
If you are in need of hiring the right candidate, the first time for your business contact us. Adecco can help you hire the right employees for your company.
Have you ever had a bad hire that kept you from growing your business? How did it affect your bottom-line?