Can you afford to make a bad hire?

Let’s look at the causes, costs and how to avoid making a bad hire.

How Much Does A Bad Hire Really Cost? A great hire can improve productivity, boost morale, and positively impact the company’s bottom line.

If a good hired has positive effects, does a bad hire have the opposite effects? The simple answer is YES!

How does a company make a bad hire? First, complacency on the part of the Human Resources or Talent Management staff. When you think about the thousands of resumes that the staff sifts through, it’s very easy to become complacent.

Second, candidates misrepresent or blatantly lie on their resumes. A Human Resources Network study showed that 50% of candidates misrepresented their experience or education while 30% blatantly lied on their resume.

George O’Leary, the Georgia Tech Head Football Coach resigned as the Head Football Coach at Notre Dame after 5 days for blatantly lying on his resume about completing a Master’s degree and for misrepresenting his University of New Hampshire college football pursuits.

Politicians lie on their resumes all the time and usually get caught. I’m not even sure why they do it.

What are the costs? Beyond financial costs, there are non-financial costs such as:

-Decreased morale- a bad hire infects morale in a company, division or team. It can even
cause a great employee to leave the company! In a Robert Half survey, company executives reported that bad hires negatively impacted workplace morale up to 95 percent of the time. That’s staggering!

-Decreased Teamwork- nobody wants a “Negative Nelly” on their team. A bad hire could
mean that the team could be less collaborative or even less of a team. The bad hire will probably not gel with company causing problems.

-Decreased Productivity- this goes hand-in-hand with teamwork. When the team
dynamics start to break down, you will see a decrease in productivity.

-Tarnished company image- a bad hire can affect and tarnish the company image in a
couple of ways. If a bad hire is in a customer-facing position, the bad hire could lose customers or potential new customers. The bad hire can also chase away great talent if it appears that the company makes bad hires.
Financial Costs- recruiting, interviewing and onboarding all cost real money as well as
people’s time that could be better spent doing productive activities. A CareerBuilder survey cited a $25,000 price tag in 41% of companies and $50,000 in 25% of the companies surveyed when they made a bad hire.

Can you afford to hire a nightmare employee? Can you avoid hiring a nightmare employee? Absolutely!

Here are a few ways to do so:
-Make sure that you are using reputable recruiting agencies and job boards. There are
thousands of recruiters and job sites, not all do their due diligence to ensure that they know the candidate they represent. In fact, some recruiters never even talk with the candidate they are representing, they simply send a resume they found online.
-Do extensive checks such as employment checks, reference checks and background
checks. Often employers skip these critical checks hoping to save some money and time. It’s not worth it. I can’t tell you how many times “great” candidates have lied to me about being employed. Once, a candidate of mine told me that he still worked at a particular company, when I called the company anonymously asking for him, his former boss told me that he had not worked there for over 2 years!
-Use assessments, skills tests and even auditions to ensure that the candidate can
actually do the job. The NFL doesn’t want a receiver to describe how to catch a football, they want to see the receiver catch the football!
Stress test- some companies interview their candidates in restaurants and ask the
restaurant staff to screw up the candidate’s order to see how the candidate reacts under stress.

Replacing a great employee is stressful enough, don’t compound with a bad hire. Do your due diligence with your recruiters and the candidates they submit. Trust me, you will be happier for making the right hire!

NOTE: I would like to acknowledge “How Much Does A Bad Hire Really Cost?” by Brett McIntyre, August 21, 2018. Read more at https://www.business2community.com/human-resources/how-much-does-a-bad-hire-really-cost-02108605 and LinkedIn Talent Solutions Global Recruiting Trends 2018, “Reinventing the Interview”.