Nothing disrupts business momentum like a bad hire. It takes you into a team-building cul-de-sac. Adding an unproductive employee disrupts with team chemistry and forces an expensive re-recruitment process.
Tired of bad hires knocking you off course? Here are some considerations to keep in mind so that you can prevent them in the future:
Cold Hard Cash
As touched on in our eBook about the future of hiring, the expenses related to a bad hire can become staggering. Each stage of the process – recruiting, hiring, and onboarding – comes with its own sizable cost. Here are a few of the cash outlays related to the process:
- Advertising Fees
- Staff Time Spent Recruiting
- Staff Time Spent Training and Onboarding
- Potential Severance
These expenses add up quickly. Some figures suggest a benchmark of 30% of the annual salary of the employee’s first-year earnings. Another estimate, looking at the all-in costs of a longer-term mistake, put the figure at close to a quarter-million dollars ($240,000).
The money lost undoing a bad hire is disheartening enough. But it’s only part of the bill. When you start tallying up the overall cost of bringing in the wrong person, there are a number of hidden fees as well.
Lowered Morale: An underperforming employee undermines team chemistry. Left to fester, other workers might start to question your judgment, contributing to lowered morale.
Reduced Productivity: The same dynamics can impact output as well. Think of the old saying about chains and their weakest links. A bad hire can slow down an entire team, leading to lost productivity.
Workflow Disruption: As projects flounder and morale sinks, it impacts your overall process. The bad hire disrupts workflow, adding another invisible cost.
Opportunity Costs: You hired the wrong candidate. Think about how much more productive you’d be if you had brought in the right person. That opportunity cost becomes yet another negative figure to consider.
How to Spot a Potential Bad Hire Early
The earlier you can identify a mistake, the sooner you can fix it. That principle applies to a bad hire as well. Once you figure out that you’ve made a regrettable decision, take steps to rectify the situation.
Better yet, identify potential bad hires before you make the decision. Here are a few steps you should take to avoid making a hiring mistake:
Want to know what it’s like to work with a potential hire? What better source than their former supervisors and coworkers? Of course, reference lists are curated by the applicants themselves. Still, you can get an idea of a candidate’s personality and culture fit by asking targeted questions.
Give a Skills Test
Nothing beats a practical test of a person’s abilities. It’s not a perfect simulation of day-to-day operations, but you can learn a lot from a targeted skill test. In addition, these can be taken remotely, so they come with little cost to you. Often, they make an ideal way to differentiate between candidates in the later stages of the recruitment process.
Start with Part-Time
Reduce hiring risk by taking a measured approach. Don’t jump right into a full-time staff position. Instead, ease into a long-term role by starting on a part-time basis.
Offer promising prospects for some contract projects in the early stages. You can see their work and continue to look at other candidates at the same time. If they work out, you can expand their role. If not, it’s relatively easy to move on.
Bad hires represent a major stumbling block to long-term growth. Avoid them by teaming with a top recruiting partner, like Recruiting In Motion. They can help you find the perfect candidates for your open positions.