Bad hires are an employer’s worst nightmare! They can cost valuable resources, such as time and money that will affect the company’s bottom line. The signs you have made a bad hire include unproductive workers, workers with negative attitudes, or workers with fewer skills than promised in the interview. Read more about the full extent of the cost of a bad hire, and some solutions to prevent this occurrence.
What is the Cost of a Bad Hire?
Loss of Valuable Time and Money
As mentioned before, these are extremely costly resources that can either benefit or restrain your company’s growth. This is perhaps one of the most direct costs of a bad hire. According to a report from the Recruitment and Employment Confederation (REC), a bad hire of an employee with a salary of 58,192 USD can cost a business three times more due to the money wasted on employee onboarding, lack of productivity, and staff turnover.
Even more, according to a SHRM Recruitment and Selection Presentation in 2008, in order to replace positions such as supervisory, technical and management personnel, it can cost from 50 percent to several hundred percents of the person’s annual salary.
Cultural Imbalance
Oftentimes, behavioral interview questions are a solid way to asses cultural fit; however, some candidates may slip through the cracks. A cultural imbalance can be fatal to companies that are smaller, such as startups. An individual that is not adding value to the company is negating from companies resources. In addition, it may become a team morale issue. This is a result of all employees not contributing to the work environment.
Disengagement is contagious. If one worker is unhappy or unproductive, this will impact the rest of the workers one way or another. Since Gallup, a management consulting company, began tracking employee engagement in 2000, less than one-third of United States employees reported being happily involved and committed working at their current place of employment.
Relationship Strain with Stakeholders and Colleagues
Bad hires will affect the relationship that you have worked so hard to establish with your clients. This is something that will continue to impact your company even after those bad hires leave. If your clients are not treated well, your reputation as a company will be tainted since we all know that your employees are a direct representation of your business.
Another workplace relationship that will be affected is how the rest of your employees view top-level management. They will constantly be judging this based on your decisions of hiring new employees since it will directly impact every aspect of their work. After all, bad hires are still their coworkers. Therefore, this will place a strain on the relationship between the management and all the employees in the business.
Refine Your Hiring Process to Avoid Hiring a Bad Apple
The cost of a bad hire is at least thirty percent of the employee’s first-year earnings. Therefore, you want to be able to rely on more than your intuition when it comes to new hires. Especially with this day and age, hiring can feel like taking a complete gamble on a person. So if you are going to make a mistake, hire carefully and fire quickly, and that will decrease the odds that are stacked against you on making the right hire.
Ensure that your next hires are not bad hires by contacting TruPath. Their tried-and-true search process assesses your companies needs, mission. goals, and values. In addition, they perform a lengthy and in-depth interview process to ensure that the person you hire is the appropriate fir. In the end, they will save you time while you sit back and relax until the ideal candidate is presented that fits perfectly with your company’s culture and skill demand.