What are the Consequences of a Bad Hiring Decision?
The decision to hire a new team member inevitably carries an element of risk. Most large organisations will have had the experience of hiring an unsuitable employee; someone who looked and sounded the part at interview, but fell seriously short of expectations when it came to job performance or cultural fit. The effect of such hiring mistakes can be huge, with significant direct and indirect consequences for the company that makes the wrong decision.
The worst employee habits unveiled
Employers say that their bad hires displayed the following characteristics:
Failure to produce proper quality of work
Failure to work well with other employees
Immediate problems with attendance
Failure to meet deadlines
Chief Financial Officers (CFOs) survey that, on average, managers spend one day per week managing poorly performing employees.
Costs of Hiring the Wrong Person
New employees can fail at an organisation for any number of reasons. Often it will be failure to work well with colleagues or establish good relationships with customers that are the biggest issues, and this tends to be linked to a poor attitude or inability to produce the expected standard of work on deadline.
One of the biggest direct implications of hiring such an unsuitable person is the immediate financial one – the costs of the initial recruitment, added to the costs of severance and hiring a replacement a few months down the line. These costs can easily run into considerable sums of money, and will rise the longer the employee is left in the role performing poorly.
But the costs go beyond just cash. The following are the direct and indirect ways companies say they have paid for hiring the wrong employee:
Lost time due to recruiting and training another worker
Expense of recruiting and training another worker
Negative impact on employee relations and morale
Negative impact on client results
Also to be factored in is the cost of lost business and opportunities over this period. The 3 – 6 months wasted with a poor fit employee could easily have been time spent with a superstar in the role, being productive, making sales, building relationships and bringing new ideas and relationships to the table.
Reasons for Bad Hiring Decisions
Sometimes it can be tempting for companies to put a poor hire down to bad luck, to shrug it off as something that ‘just didn’t work out’. In reality, there will almost always be shortcomings in the hiring process that lead to such errors.
Sometimes it will be the case that candidates are not interviewed or vetted properly, leading to assumptions being made over their suitability for a role. For example; assuming that a candidate will fit a role because they have held similar positions in the past is dangerous, because it does not take into account the differences in culture, environment and working practices from one business to another.
Surely, given the huge investment involved it makes sense to make your hiring process as watertight as possible, minimising the likelihood of mistakes and incorrect assumptions being made in the first place. This is where a retained search firm increases success rates. They use their experience and expertise to look beyond the list of skills on a CV and actually assess the person behind it thoroughly, ensuring nothing is left to chance and the right individual is hired for the job first time around.
With retained searches, Oakstone delivers additional qualification tools such as balanced scorecards, detailed candidate profiles plus thorough qualification from in-depth 1st stage interviews and reference taking. The added value and time savings derived from the input of an experienced, professional firm will pay for the investment time and again.