Oct 20, 2021

What is the Cost of a Bad Hire?

One of the costliest business decisions a company can make is hiring the wrong applicant. It’s one of the more unfortunate reality that a lot of businesses make similar mistakes, and more than 74% of employers agree that they have hired the wrong person for a role. The impact of a bad hire can not only impact a company financially, but the cost of a bad hire will also impact the company culture and team morale.

Let’s calculate the cost of a bad hire, shall we?

77% of employers agree that they failed to notice the warning signs of a bad hire and it has had an adverse impact on the company.

56% of employers say that the negative impact caused by a bad hire has been more severe than it was over a year ago. 39% more time is wasted when you hire someone who is not a good fit. The impact of a bad hire decreases the staff morale and efficiency by 30% and it increases the stress on a supervisor by 15%.

It takes almost 11 weeks to terminate a bad hire and more than 5 weeks to restaff that position. Let’s take a look at some of the warning signs of a bad hire and what you can do to avoid making a hiring decision that could potentially cost you money and staff morale.

The warning signs of a bad hire

1.The candidate has trouble understanding the basic tasks associated with the role

Their work is littered with errors, and they never are never able to deliver a task on time. You also notice that they seem to be struggling with basic tasks. So, what can you do to nip this in the bud during the interview process? If you find yourself speaking with a candidate who doesn’t grasp what kind of work the job in question is or has completely misunderstood what the role is all about, it can either mean that your job posting was unclear or that the candidate didn’t take the interview seriously and came unprepared. Either way, it might be a good idea to keep looking for another suitable candidate.

2.The company culture has taken a nosedive!

If you notice that within a few weeks of hiring the new employee, the team environment has been sour. It could be any number of reasons such as, the candidate’s values or personality just does not align with the company culture. This can be gauged during the interview with a series of soft skills related questions, which will give you a clearer idea of the candidate’s personality and values. This is also another reason why it’s always a good idea to have some team members present during the panel interview.

3.Time management is an issue

Is the new employee constantly arriving late to work and leaving early? Are they struggling to meet deadlines and seem to be unable to prioritize tasks? If you have noticed these warning signs, it could have a knock-down effect on the rest of the team and could cause delays that affect productivity. To avoid having to deal with this after making your hiring decision, you can assign a timed assignment during the interview and see how well they do with it, or you could ask time management related questions that will give you a clearer picture on how they handled projects in the past.

4.They treat the lower-level employees differently

Some candidates are charming if they know that you’re the hiring decision maker, but they may show a different side to the other employees. If a candidate is rude to the receptionist, or makes rude remarks to their peers, take this as a sign of a bad hire. You can speak with the lower-level employees in confidence to see what they think of the new hire to avoid the cost of poor recruitment and selection.

5.Your gut says that this isn’t the right hiring decision

Sometimes it pays to listen to that nagging voice at the back of your mind that tells you, you’re making a bad hiring decision. If you ask 9 out of 10 hiring managers about the bad hiring decisions that they’ve made, they’ll tell you that they ignored a bad gut feeling during the interview process. So, listen to that gut feeling the next time you feel that someone isn’t quite right, and dig a little more to find out if you’re actually right.

6.Keeps rescheduling the interview multiple times

You’ve scheduled and rescheduled an interview with the candidate more than 3 times and here they are asking to reschedule again! This is a huge red flag and shows that they may not be taking the role seriously. It also shows that your time is not being valued. In order to avoid this, we suggest giving a two time reschedule limit and then letting the candidate go. Even if it’s a hard-to-fill role, it’s not worth having someone onboard who doesn’t value other people’s time.

7.You’re not sold on the candidate during the interview

We know that you may have deadlines to meet while filling a position, but is it worth making a poor recruitment decision and risk a far bigger loss? If you’re not completely sold on a candidate during the interview process, there is always a good reason behind it, and you’d be far better off continuing your search. Rather than making a bad hiring decision, you’d fair a lot better keeping the position open and searching for temporary solutions like temp-workers, or contractors while looking for the right candidate.

Remember that you’re far better off spending the time and energy on finding the right candidate than hiring someone because you need to fill a position and then regretting that decision. Be selective about who you hire, and you’ll ensure that you have a healthy team and company culture.