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The Cost of Bad Hires & How to Avoid It

No one wants to bring on a less-than-stellar candidate, but what happens when you make a truly bad hire? This common practice is often preventable, and getting a handle on it now can save thousands in wasted costs. Here’s how to avoid bad hires. 

What is a bad hire?

A bad hire can be any new employee that you regret bringing onto your team. In the human resources world, however, a “bad hire” is one that shows certain undesirable qualities, including these red flags:

  • Not meeting the requirements of the job description
  • Lacking the initiative or focus on doing good work
  • Lying or leading the hiring team about their abilities or skills
  • Thinking or talking only of themselves, the opportunities the job provides, and what they can get out of the position
  • Inability to fit in with the company culture and mission, as well as the vibe of the coworking group
  • Displaying toxic behavior, such as gossip, divisiveness, bullying, or dishonesty, whether it’s in person or on social media

A bad hire may not be any of these things, and it may just be that they’re not the right fit. Someone that appeared qualified on paper and who did well in interviews may just lack a personality trait needed to thrive. Sales or marketing may take a level of assertiveness, for example, that certain hires won’t possess. 

What is the cost of a bad hire?

The average cost of a bad hire is estimated to be at least 30 percent of the employee’s first-year earnings. You can then factor in the cost of hiring the person in the first place, which experts place at more than $4,000, and you’re looking at some serious financial headaches.

But it’s about more than just the money. Other measurable consequences of a bad hiring decision include the following, and they impact everyone from existing high performers to your HR professionals:

  • Lost productivity from re-doing the entire onboarding process (training, assessing, etc.) to find the right fit
  • Unsatisfied customers or clients who interacted with this bad hire or deal with the hire’s inability to do their job
  • Loss of workplace contentment, either due to toxic behavior or their coworkers being required to fill in the gaps for the bad hire
  • Missed time spent dealing with a bad hire rather than achieving other goals
  • Damage to the brand reputation, which may have taken a hit from the actions of the hire or news about the hire that was spread outside of the company

It’s not always apparent what damage is done from hiring the wrong person. Often, the ripple effects are felt for a significant amount of time, be it months or even years later. In fact, you may not notice some issues until after the bad employee has moved on.

How to avoid bad hires

Sometimes, it’s possible to learn from hiring mistakes and tweak the hiring process to avoid very specific or obvious hiring flaws. Additional interviews, background checks, or even trial hiring periods can prevent some of these situations. Still, other strategies take time to develop and need to be carried out over the long-term.

1. Make sure you’re looking at the larger picture

One or two bad hires over the years won’t equate to a trend of any kind. However, if more and more of your new hires don’t work out, you probably have a flaw in your hiring process. This could be your interview process or the way you select candidates for open positions. You may also want to examine the engagement level of your existing employees, and take a look at if you truly understand your company culture. 

2. Create strategies to ensure you’re hiring for fit, not just skill

Someone who looks amazing on a resume may not be what you’re actually looking for in terms of people skills and the ability to work well with a team. Don’t only rely on a qualifications list to make your choice, even if it’s unbelievably impressive. Likewise, look to see that you’re hiring not just for today’s skills but the potential for advancement down the road. Managers, especially, need to show the desire for growth and development, even if they’re more than qualified at the time of hire. 

3. Interview multiple candidates

What happens if you find the hire of your dreams upon your first interview? Resist the temptation to throw all of your eggs into that one basket. Not only is it best to see what else may be out there, but you don’t want to lock in your choice to someone who may turn out to be a bad fit very close to the start date. It may be best to hire a variety of candidates, even those who have slightly different skills or experience levels than what you requested in your job advertisement. 

4. Use more than one interviewer

Everyone has a bias. Even if you’re aware of your personal preferences, you will have a tendency to want to hire a certain type or a particular skillset. This can lead to uneven team structure and may even get you the same type of bad hire over and over again. To ensure balance in these decisions, consider bringing in another team member or hiring manager to interview and present their feedback. Having just one additional hiring partner can help you see any blind spots in your hiring technique, which is best for all involved. 

5. Don’t rush to make a decision

Don’t decide on your next hire right away. Your hiring process should be steady, with plenty of time for reflection. Even if you need the position filled yesterday, your hiring results will improve with a more patient approach.

6. Run thorough background checks

Background reports can tell you many things about a candidate that won’t come up in an interview. While you can’t and shouldn’t rely solely on criminal history to tell you whether someone will be a good fit, it can help you make a more holistic decision when paired with an interview or skills assessment. Good hiring teams and recruiters use every legal means at their disposal to find the best person for the job.

Why you should consider an Elastic Recruiting provider

If any of these additional hiring steps seem like too much for your team, consider outsourcing some of the work. An elastic recruitment provider can take some of the more cumbersome steps in the recruitment process and simplify them. It’s also a good fit for anyone who wants consistency in hiring, less bias, and the same process for every candidate. Using experts like those on our Comeet team can help you avoid making expensive hiring mistakes in the future.

Want to learn more about how Comeet can help? Check out our full breakdown of how we make hiring smarter and try a free demo of our services.

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