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Signs and Costs of Hiring the Wrong Person

Posted by Ryan Howard on Fri, Sep 02, 2016  |  Share       

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Recruiting, interviewing, screening and hiring are only part of the process of gaining new employees for your organization. Hiring and HR managers have much to consider beyond this - salary, benefits, workplace culture - and that doesn't even begin to cover the regulatory compliance challenges of hiring. With so much pressure to ensure a great company fit, the reality is that sometimes you will hire the wrong person. As with any challenges, the first step is recognizing that there's a problem and identifying why it's not working. 

Have you considered the true cost of hiring the wrong person in your organization?

Signs of a Bad Hire

The resume looked perfect and the interview went flawlessly. The employment background check disclosed a clean criminal record, solid education and licensing. Since the hire, however, something has seemed off. Unfortunately, a bad hire may not be revealed until after the employee's first day on the job. It could be all manner of reasons that things aren't working out. Maybe their personality doesn't fit with their team. Maybe they aren't the positive, happy-go-lucky candidate they presented themselves to be in the interview. Maybe there's a possibility they lied on their resume. Recognize these signs early so you can make a change instead of placing blame:

  • Special treatment/Complaints - If your new hire is suddenly asking for more than what was agreed in the hiring process, you may raise a red flag. Certain shifts are normal as the employee adapts their new position but if they're complaining instead of offering solutions to issues, they may not be willing to compromise.
  • Existing Employee Complaints - Typically a bad fit may be revealed when one or more existing employees begin to raise concerns about the new hire. If you have a trusted team and several members begin to question the personality fit of the new employee, listen and acknowledge. 
  • Lacking focus and initiative/Making repeated mistakes - The reason for a new hire is to help the team. Obviously there will be training involved when onboarding the employee, however if the new hire is not focused, learning, offering to help and/or making the same mistakes repeatedly, there may be more going on.
  • Personality or Temperament Clashes - If your business requires working closely with others or with a fragile population (elderly citizens, children), it is in your best interest to take note of unexpected personality or temperament clashes with your new employee. If they are easily losing their temper or appear threatening, this may not be the job for them. 

See also: What is Negligent Hiring and What Can HR Do to Prevent It?

Costs of a Bad Hire

There are numerous studies that can offer the financial cost of a bad hire. These costs can include recruiting, screening, on-boarding, training, productivity loss, and errors. The Society for Human Resource Management (SHRM) even presents a Cost of Turnover Worksheet for calculating the cost to your business. The real cost may be unquantifiable simply because of the effects of keeping the wrong employee in the wrong job for too long. Retaining employees will cost considerable less than employee turnover but it's only optimal if it's a good fit for both employee and company.

Sometimes you may find that it's best for your company and the employee to move on. Some unrecoverable costs include:

  • Loss of employee morale - If your current employees aren't happy with the new hire, it will affect overall morale.
  • Company reputation - Job candidates are wise to do research on your company but if you have unhappy employees, whether they are long-term or brand new, they may share their dissatisfaction. The damage to your reputation could affect the potential hire of more qualified candidates.
  • Loss of customers - Bad customer service or repeated mistakes could affect your bottom line. Your customers will expect your employees to represent your company. Make sure they're a good fit.
  • Lack of innovation and productivity - A startup company or any other organization that relies on innovation and productivity from their teams may see a dramatic drop with a bad hire. In some markets, this could potentially effect the success of your business.

Why are there Bad Hires?

Hiring mistakes are not unusual for organizations of all sizes and here are a few reasons why:

  • Hiring needs have to be addressed quickly for growth
  • Recruiting advertisements don't meet the actual requirements for the job or company culture
  • Decision process is rushed due to time constraints or fear of missing out (FOMO) on the right employee
  • "Quick" or "cheap" background checks reveal inaccurate or incomplete candidate information
  • Background checks are not conducted to save time and cost
  • Candidates present themselves differently during the hiring process/Hiring on "gut instinct"

Running themes among the reasons for bad hires are (1) needing to hire at a fast pace and (2) misrepresentation. As with any decision, feeling rushed means that less research is utilized to determine a good fit for your company. Often, less research means none at all or looking for fast turnaround on background checks. Fast turnaround doesn't always mean accurate, however, and inaccurate or incomplete data could ultimately lead to revenue loss or potential negligent hiring claims. 

The Right Employee for the Job

Finding the right employee for the job can involve more than just slowing down the hiring process. It may also involve including current trusted employees in recruiting and building company culture. Listen to those who have already proven that they care about the success of your business. Also, be aware when those same employees have something to say about a new hire that simply isn't working out. 

A hiring manager that's given a short amount of time to decide on job candidates can also have tools to help facilitate the hiring process. Keep files on potential future employees. Network. Slow down, if possible. Most importantly, partner with a professional background screening company who understands your hiring needs, can offer an efficient screening process and works with you to offer the best cost.

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Topics: hiring employees, hiring practices, negligent hiring

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