Have you ever wondered what the implications and costs to your business may be by hiring the wrong person in to your team?
Making a mistake when hiring is a bitter pill to swallow for any manager. I hate to admit it, but I have done this myself and regretted my hiring decision pretty quickly.
But what did it cost me? Well let’s take a moment to think it through.
There are countless aspects and costs that can be taken in to consideration surrounding a bad hire. This list is by no means exhaustive, however it might just highlight to you the need for caution when hiring. Take the time to recruit properly and thoroughly without cutting corners, and remember what seems a cheap and easy option could cost you dearly in the long run.
Besides the obvious costs of the employee’s salary and any recruitment/advertising costs you may have incurred during the process, there are many more costs you need to consider.
In a Yahoo employment survey in 2012 it was suggested that more than 40% of people applying for a job had been dishonest on their application. It is easily assumed that the depressed global economy has caused many people who would not normally prevaricate on an application are doing so now in order to do whatever it takes to get the job that they so desperately need.
So let’s rewind a few months to when you were recruiting your last role. How much time did you personally invest in the recruitment process? If you were thorough, you will have met with a couple of trusted recruiters, spent time with HR discussing the brief before receiving CVs from a number of channels. Then once you have vetted all the CVs follows a healthy interview process with a number of applicants before an offer is made to the successful candidate. It could have been as much as a full week of your personal time invested, but this is only the start of it.
Now lets shoot ahead to the day of commencement for the new employee. How much time is invested in the ‘on-boarding’ process? It may be you, it may be the HR team who induct all new employees, some companies take up to a week with this process.
Then on top of this there will no doubt be some element of training for systems, processes and general day-to-day activities. Perhaps yet another week of down time will have passed?
But how long will it take you to spot that your new employee is not quite what you had hoped they would be and doesn’t quite have the skills they claimed to have in their interviews? I have heard horror stories where the bad apple employee stayed for well over a year, all the time failing to deliver themselves, but more concerning affecting the morale and performance of the overall team they were employed to compliment.
This has to be the most worrying aspect of a poor hire. Just how much will the overall business performance be affected?
It is estimated in the book “Top Grading, How to Hire Coach and Keep ‘A’ Players” that a person who was hired wrongly to do a job with a $100k salary could cost the company more than a million dollars in lost revenues or assets before they left their employment position.
A million bucks lost through a poor hire?!….WOW!
That is just incredible…. To think a business could lose so much money or revenues through one bad hire. But what if there were a few of them in the team?
While this massive amount of money lost might seem extreme and perhaps a little over the top, surely it is enough to make you think twice about your hiring strategy in the future?
A quote I have heard used many times in my career is to ‘Hire slowly and fire quickly”…. This is not cause for you to become a ‘hire and fire’ manager, it actually encourages you to be cautious when hiring and take your time. It also suggests you recognition your mistakes swiftly and take appropriate action to rectify them by professionally removing the bad apple.
Don’t rush the recruitment process. Take your time to do a complete and thorough market search using a trusted specialist recruiter. As with anything in life, always look closely at what appears to be a great deal or ‘on the cheap’ A mistake when hiring could easily cost you way more than you had bargained for.