If you’ve ever recruited new employees, you’ve probably experienced a “bad hire.” You know… that person who does not perform well or is not a good fit. Usually, you quickly become aware of your hiring mistake or employees will inform you. But in the worst case, you will not find out about the bad hire until employee morale starts to dip and productivity decreases.
In Good to Great, Jim Collins states, “The most important decisions that businesspeople make are not what decisions, but who decisions.” The people of an organization are what makes it go, but also where issues start.
A Forbes study found that of new hires that failed, 89% failed because of attitude and 11% due to lack of skill. Therefore, recruiters need to recruit, assess and teach attitude.
“Hiring the wrong person can be one of the most expensive mistakes a business makes,” said Cynthia Cole, AgCareers.com Talent Solutions Manager.
Cole says employers need to think of all the concrete costs associated with hiring:
- Drafting the position description
- Advertising costs
- Agency/recruiter fees
- Interview time
- Candidate interview expenses
- Training & orientation
- Employment testing
- Total compensation
- Termination costs
- Relocation costs
- Outplacement/career transition
- Cost to repeat the process
These concrete costs are compounded by the hard-to-quantify costs:
- Erosion of team morale
- Upset employee trust
- Damaged customer loyalty
- Lost sales
- Reduced productivity
- Hire other “C” players
- Discouraged high-performing employees
- Decreased sales
- Co-worker employee turnover
Different professional and government agencies have quantified the true cost of a bad hire, determining it can be anywhere from one-third to five times the annual salary of the hire.
Why did you make a bad hire?
Sometimes it’s time pressure - you need to fill the job quickly. On average it takes more than a month to fill vacancies. “Don’t be in such a hurry that you resort to hiring anyone to fill the spot. Rushing will cost you more in the long run. Remember that hiring the right candidate takes time,” advises Cole.
Did you find out your hire was unqualified or didn’t fit your company culture? Cole suggests conducting chronological screening, which helps in determining the details of the applicant’s previous jobs and reasons for leaving.
Utilize behavioral and situational questions to assess cultural fit and skills. Create a team approach to assessment where the HR manager screens for the cultural or long-term fit, while the hiring manager screens for technical expertise, relevant experience, and fit within the team.
Checking references is a critical step, not only to verify qualifications but to assess personality/compatibility. Conduct appropriate pre-screening to assess their competencies - can they do the job? Also, screen for their attitude - will they do the job?
The opinions of the author are not necessarily those of Farm Futures or Farm Progress.