In business, few mistakes are more costly than hiring the wrong person. At best, a bad hire forces you to start the hiring process all over to refill the position. At worst, this bad hire could contribute to a toxic work environment that drives away valuable employees, lowers morale and hampers productivity. Either way, the results can be quite costly to your business.
At a time when rising costs and recession concerns are challenging businesses across industries, employers cannot afford the costs of a bad hire. Instead, employers must develop an efficient recruitment process that leads to faster, smarter and better hiring decisions.
In this article, we explore how you can enhance your hiring process to minimize the risk of making bad hiring decisions. You will also gain access to a free guide on creating a winning job description, ensuring the candidates you connect with are the best fit for the job from the start. In the end, you’ll have a clear plan of action for minimizing bad hires and maximizing good ones.
the cost of hiring an employee
Many companies underestimate just how much a bad hire can cost the company. On average, the cost of hiring an employee ranges anywhere from three to four times the position’s annual salary. These hiring costs include pre-hire expenses, such as advertisement fees, screening and interviewing as well as post-hire expenses, including onboarding and training. These costs also include indirect expenses, ranging from diminished productivity to decreased client satisfaction, that the company may incur until the role is filled.
The ramifications of a bad hire can go well beyond these costs. If you’re lucky enough to identify the bad hire early and take steps to seek a voluntary or involuntary termination of employment, your costs may be limited.
On the other hand, if this bad hire remains with the company, the damage can be far-reaching. It only takes one bad employee to create a toxic work environment that impacts everyone around them. These conditions can create an avalanche of disruptions to your workplace, including:
- drop in productivity: Filling a role with a toxic employee can directly impact production levels for the entire workforce. This factor is especially true for industries that heavily rely on teamwork and collaboration, such as manufacturing and construction.
- increase in turnover rates: Toxic workplace environments are known to drive higher turnover rates. One bad hire has the potential to drive away even your best and most loyal employees if not dealt with appropriately.
- decrease in quality of goods or services: Imagine the damage an unqualified worker on the production line, an untrained worker on your construction crew or an unethical salesperson on your team can do to the quality of your company’s goods or services. This is exactly what can result from making bad hiring decisions.
- heightened safety concerns: Bad hires who are unable or unwilling to follow safety protocols can put your company at heightened risk for safety concerns. These safety issues in the workplace can be dangerous for your workers and quite costly, even putting your company at risk for hefty fines.
how bad hires happen
It’s well understood that hiring successful employees creates organizational value and hiring unsuccessful employees takes away from it. So, why do so many organizations approach recruitment in a fragmented or even haphazard way?
From our experience, the main reason is a disconnect between HR and hiring managers. In light of this, we’ve identified four key factors that contribute to bad recruitment processes and, as a result, bad hires.
1. hiring managers don’t realize the cost of a bad hire.
While HR teams may have a good understanding of just how much it costs to replace a bad hire, hiring managers may not. When hiring managers fail to understand the full impact of their hiring decisions, they may be less stringent when it comes to picking the right candidate.
2. hiring managers lack training in good hiring practices.
It’s a misconception that the hiring manager is best fit to recruit a new member of his or her team. Without adequate training, your business could be at risk. For instance, it's crucial for hiring managers to possess exceptional interviewing skills to bring in the ideal candidates.
3. hiring managers feel rushed to fill a position
Companies hire new employees in times of need, so there is always internal pressure to get it done quickly — their staff is overextended, for example; or an employee has left abruptly, leaving a critical role unfilled. Hiring managers can be hasty in their hiring decisions, disregarding candidates’ shortcomings and even overlooking red flags as a result.
4. hiring managers don’t use a standardized hiring process
Despite the fact that standardized hiring practices can speed up the recruitment process and lead to better hiring results, many companies still lack standardization. The absence of it allows hiring managers, who may have limited recruitment experience, to develop their own practices, potentially increasing the risk of making poor hiring decisions.
In each of these scenarios, bad hiring decisions are caused by a lack of collaboration between HR and hiring managers. Just because the HR team may not make the final hiring decisions doesn’t mean they don’t play a pivotal role in the hiring process. HR teams must set hiring managers and new employees up for success. They must team up with hiring managers —especially during the interview process, where both interview skills and subject expertise are critical. Next, we’ll review how both parties can accomplish these goals.
how you can ensure a successful hire every time
As the leading global HR services provider, Randstad collaborates with a wide range of companies across different industries to help them secure top-notch talent. We know an efficient hiring process is critical to ensuring the long-term success of your company and your employees. That’s why we’ve identified five key areas that you must excel in to reach, discover and select the right hires, every time:
1. optimize your job descriptions and advertisements
Job descriptions and advertisements are gateways to new candidates, so ensuring they work in your favor is critical. They make the difference between choosing from a handful of great candidates or a handful of poor ones. As you begin, think holistically about the needs of your team and organization.
2. brand your company and its culture accurately
Just as managers get frustrated with bad employees, new employees perform poorly when company culture isn’t what was advertised. Employees want to feel a sense of purpose at work and that they belong. Our research shows that more than one-in-two workers would leave their job if they felt that they didn’t belong. The good news is that this sense of belonging can improve productivity and retention while decreasing absenteeism.
Be sure potential candidates reading your job description will understand your company culture. Additionally, make sure to communicate key aspects of company culture during the interview. Establishing realistic expectations about the role early will prevent poor fit candidates from slipping through. This step also gives candidates the ability to determine if the job is a good fit for them.
3. formalize interviews to address critical aspects of the job
Too many companies lack a standardized interview process. This prevents hiring managers from communicating and receiving critical information, including details about the candidate’s behavior, situational responsiveness and technical aptitude. What’s more, hiring managers cannot accurately compare the results of multiple interviews if they are not using a structured interview process.
Additionally, don’t assume your hiring managers have experience conducting meaningful interviews. Instead, make sure your company provides comprehensive interview training to all hiring managers. This step will ensure a cohesive interview process across all levels of management.
McKinsey recommends standardized assessments as a structured approach to gathering information about potential hires. ‘If there isn’t direct science linking the assessment to job performance or to the characteristics that matter for the job in question, don’t use it,’ they explained.
4. look for universal qualities of successful employees
In addition to finding employees with the right experience and skill sets, hiring managers should know to look for key characteristics that every new hire should have — no matter the position. These include willingness to learn, integrity and collaboration. Similarly, hiring managers should know the qualities they do not want in a candidate — and why — by naming and defining them ahead of time.
There are a number of skills assessments that can help you gauge a candidate’s hard and soft skills. These assessments provide an unbiased way for employers to accurately compare candidates’ skills and abilities prior to hiring, which can help to prevent bad hires.
5. Invest in HR technology
In today’s fast-paced markets, employers should leverage HR technology to streamline their recruitment process. For instance, using technology to automate the reference checking process allows your company to develop a faster, more accurate screening process. Additional HR tech tools, such as video interviews, can provide a better candidate experience and allow greater collaboration among all staff involved in the hiring process.
When choosing the right HR tech tools for your organization, be sure you fully understand the potential and benefits this technology has to offer. Also, provide your HR team with the training necessary to implement and manage the technology. This step can help your company maximize its investment in HR tech.
a future of successful hires is within your reach
Hiring success starts with getting the right candidates through the front door — and that starts with your job descriptions and advertisements. Take the next step in your recruitment journey: Download our free guidebook for creating successful job descriptions today.