Hiring the wrong person for the job is a costly mistake in more ways than one. According to a study conducted by the recruiting industry, the true cost of onboarding an employee at the middle management level is $240,000. That is when everything goes well and the new hire is a good fit for the job. When he or she has the external qualifications but fails to be a good fit, that cost increases to $840,000.
The author of the report arrived at this figure by estimating the salary, benefits, and onboarding costs of a manager who stayed with the company for two and a half-years and was then fired or left voluntarily.
The report further indicates that nearly four out of 10 hiring managers made a job offer based on a gut feeling or the fact that the company needed to fill the position immediately. This may solve a short-term need, but it usually has long-term consequences that are unpleasant for everyone.
The Costs of a Bad Hire Are Not Always Financial
The time and money required to recruit for a new position, interview candidates, and provide training and mentoring until a replacement is up to speed are obvious. However, hiring managers often overlook some of the hidden costs of not hiring well. These include:
- Delayed or missed opportunities: Companies that must deal with frequent staffing issues don’t have the time and resources to advance in the marketplace. They miss taking advantage of new technology to release products and services better and faster than the competition.
- Increased pressure on remaining staff: When a position remains open, someone has to take on the responsibilities of that role. The duties typically fall on others in the department who must complete these tasks in addition to their own work. When this goes on too long, it leads to resentment, burnout, and more people resigning due to the stress. This leads to low morale across the board, which is a vicious cycle for companies to break.
- Lack of strength in key positions: The most successful companies have a core group of people that can get the business through any challenge. When top positions are unfilled or staffed with the wrong person, it can have a serious impact on the company’s future.
Tips for Avoiding a Bad Hire
Unfortunately, including inaccurate information or outright lying on a job application or resume is a common practice. This requires a strong screening process to avoid hiring someone who doesn’t have the credentials he or she claimed. Interviewers also need to go beyond asking questions about skills to determine suitability for a job. Using competency based questions to discover the attitudes and motivation of a candidate and predict future behavior is ideal.
With application fraud on the rise, it’s essential to verify an applicant’s true identify with systems such as E-Verify sponsored by U.S. Citizen and Immigration Services. Checking an applicant’s social media profiles is another way to judge character and see whether the causes he or she supports match the company’s core values.
Lastly, hiring managers can go beyond the references provided to find shared connections through social media. These people are likely to give a more honest report when approached by a company rather than the job applicant directly.