What’s the cost of hiring the wrong person?
Too much and in most cases an unnecessary expense. Each company has their own cost. How much? It depends on the business and the position, but hiring the right person is not impossible. Check out the latter part of this post for our Tips to Hire Better.
“80% of employee turnover is due to bad hiring decisions.” – The Harvard Business Review.
We’ve seen that stat many times over the last several years and as the economy slowly rebuilds itself, hiring the wrong person can be even more costly. How so? It’s simple economics really. Take Illinois, for example, states like these are still struggling with high unemployment rates well over 9 percent. Like the economy, many business segments are growing at a slower rate, which means they are slow to hire. Because of the ongoing ripple effect, employers now—when they can hire—must do so effectively in order to stay within their stringent budget guidelines. And most importantly, they can’t afford to make mistakes.
The costs of a bad hire may vary based on a business segment. IT industry and Finance industry costs has been known to surpass six figures for hiring the wrong person. Those fees can shift even more depending on the position. According to another recent survey, Harris Interactive on behalf of CareerBuilder, “27 percent of U.S. employers reported a single bad hire costs more than $50,000.” These fees can run the gamut and often don’t include intangible costs like decreased moral and the true loss of productivity.
Employer Tips to Hiring Better
In order for employers hire better, we’ve created a list of action items that will help employers reach their goals:
• Define what you want: Get as precise as you can. Nothing is worse and more costly than hiring the wrong person because there wasn’t a clearly defined job description.
• Focus on skill set first: With the economy lagging in recent years, there may be lapses in employment for some candidates. Focus on whether a candidate has done the job before taking in other factors.
• Check References: This is a critical one to use. References can easily ferret out worthy, mediocre and dud candidates. See our Bradshaw Referencing page for examples of how thorough employers should be.
• Personal Traits: Does the position require a more leadership role? If so, what type of personality traits have been assessed from the candidates? Some firms go as far as providing personality tests to candidates. Either way, take the necessary steps to make sure the candidate can integrate well into the new environment.
• Social Trends: Everyone has heard this statement at some point, “Expect to be Googled.” Be sure and go through the necessary steps to evaluate a person’s reputation online. On LinkedIn, for example, review how many connections or recommendations a candidate has. What’s their profile image and description look like? Are they connected to other social networks? If so, do all the necessary research to discover whether the candidate will be a right fit for you.
Avoid the pitfalls of hiring the wrong person. Make internal and external partners like managers and recruiting firms accountable to get your business the results you need. Looking for more input? Shoot us an email and we’ll be happy to assist.
