The True Costs of a Bad Hire & How to Avoid Them

costs of a bad hireThe thought of hiring a new employee can be stressful. Not only is advertising, searching for, interviewing, and onboarding new employees a major consumption of time, it can be expensive to the company. In order to maximize efficiency, you want to recruit the best possible candidate but may also be strapped for time.

So, do you race the clock and hire the first candidate that fits the job description requirements? Or do you prolong the process and spend even more time searching and interviewing, while potentially risking productivity as the role is left unfilled? Neither is favourable and ultimately, hiring the wrong employee can be much more expensive than you might think.

According to some resources, the monetary costs associated with hiring the wrong candidate can reach $17,000, while others equate the costs as high as $240,000. Sometimes it’s not immediately clear when a new hire is a bad apple, so these costs can become higher the longer the problem goes on.

Here are four ways bad hires are costing your organization:

Decreased Employee Morale

While we wish bad hires kept to themselves, they have the tendency to rub off on other hard working employees. Whether the new coworker isn’t pulling their weight, turning in poor work, or just not a good fit with the company culture, the rest of the team can suffer.

Decreased Productivity

When employees aren’t happy, they usually don’t work as efficiently. And while you might think the new hire is the only individual contributing to lower productivity, low morale can quickly cascade throughout the organization.

Disruption Costs

If you’re hiring for an existing position that’s currently unfilled, the longer you spend searching for a new employee, the longer that position (and the responsibilities involved) will remain incomplete. This could mean projects are postponed or worse, customer orders are late.

Lower Sales

Happy employees = happy customers. You know how important customer satisfaction is, and that non-customer-facing employees can also directly impact sales. All of the factors above can contribute to poorer quality products or services and thus directly impact your bottom line.

How to Avoid a Bad Hire

Call the References

It sounds simple, but unfortunately many hiring managers overlook this key task. You probably wouldn’t visit a restaurant without looking at customer reviews, so why leave an important role in the company to someone who only comes across well on paper? Word-of-mouth referrals and recommendations are extremely indicative of a potential employee’s personality and work ethic.

Develop a Culture Book

Skills and experience aren’t the only things you should be looking for. Ensuring your new candidate jives with your company culture is top of mind among organizations. But how can you be expected to hire an individual who demonstrates the company’s culture if you haven’t identified it? Work with your marketing or communications team to develop a culture book that outlines the personality of the company.

Leave it to a Professional

Recruiters can be invaluable when it comes to avoiding a bad hire. How do they support your recruiting efforts? A skilled professional or agency has:

  • Extensive experience in recruiting and interviewing
  • More time to dedicate to the process of hiring
  • Advanced reference checking capabilities
  • Access to a large network of candidates
  • Experience with closing employees and creating an appealing offer

Tired of cycling through employees? Get in touch with Worth Recruiting today to ensure your future hires are successful in their roles.