Understanding the True Cost of a Bad Hire

October 23rd, 2015

When your company is understaffed and your current team is seriously overworked, it’s only natural to want to hire someone, anyone to fill your open positions immediately. However, hiring decisions made in haste rarely have a positive outcome. In fact, it can have a detrimental impact on your entire organization.

In a recent CareerBuilder survey, 41% of companies said a bad hire has cost them at least $25,000 in the last year. If you think that’s bad, 25% of those surveyed revealed that a bad hire has actually cost them at least $50,000.

Hidden Costs of a Bad Hire

Monetary costs are easy to add up, but indirect expenses can actually be even more detrimental to your bottom line. Bad hires can result in lost worker productivity, lost time needed to recruit and train another employee, costly expenses to recruit and train another new hire, negative employee morale and they can have an adverse impact on client solutions.

The survey revealed that companies hire bad employees for a number of reasons, including a need to fill the position quickly (38%), the person just not working out (34%), the company’s failure to adequately test or research the person’s skills (21%) and not performing adequate reference checks (11%).

It can be difficult to avoid making bad hiring decisions if you don’t know which red flags to look for in candidates. Employers surveyed noted their bad hires displayed these characteristics:

  • Failure to produce high-quality work — 63%
  • Failure to work well with others — 63%
  • Negative attitudes — 62%
  • Immediate issues with attendance — 56%
  • Employee caused customer complaints — 49%
  • Failure to meet deadlines — 48%

 

Increase Your Chances of a Great Hire

Hiring decisions are always somewhat of a gamble, but you can greatly increase your chances of success by following these three rules:

  1. Learn How to Interview Right: All job interview questions are not equally effective. It’s important to ask open-ended questions, so you can learn more about the candidate and their fit for your team. Get below the surface to gauge the person’s true colors.
  2. Always Conduct Reference Checks: Calling a candidate’s references won’t take a lot of time, but it can save you from making a huge hiring mistake. References are people who have worked with the candidate in the past and can speak to their skills, personality and other key attributes. Don’t miss out on this valuable learning opportunity.
  3. Make New Hires Feel Welcome: The first day of work is always nerve-wracking, so make your new team members feel appreciated from the moment they walk through the door. Have their workspace prepared, plan a group lunch, introduce them to their new colleagues and get them started in a comprehensive training program.

Make bad hires a thing of the past by partnering with Accountingpros Recruiting + Staffing today! Our experienced recruiters are committed to finding the right fit for your team.