One Bad Hire Can Cost a Company over $25,000


personal background check, Background check, bad hires, Employment, hiring, Human resources, hr, recruiting, staffing, A recent survey by Careerbuilders.com revealed that it is expensive to make a bad hire. One in four of the companies responding to the survey claimed a single bad hire cost in excess of $25,000.

OK, first of all what is a bad hire? A bad hire, obviously, is one that did not work out for the company and required termination. The major characteristic identified in the survey was that the individual didn’t produce the proper quality of work. Also, negative attitude and the inability to work well with other employees was cited. Negative effect on customers and legal issues were other problems.

How does a bad hire ring up the costs? Lost productivity and lost time taken to train an individual combined with the costs to locate and hire a replacement are expensive. A bad hire or bad apple can infect the morale of a team and bring down productivity in others as well. Often, a company’s culture will quickly identify someone who isn’t going to work out. That is if the company has a positive culture.

Very well, what can a company do to prevent bad hires? Sometimes a candidate is an excellent actor and can fake their way into a company. The CareerBuilder survey revealed these reasons that a bad hire is made:

  • The company is in a hurry to hire (42% of survey respondents)
  • Not sure why (25% of survey respondents)
  • Information about the candidate was insufficient (22% of survey respondents)
  • Bad recruiting system (13% of survey respondents)
  • Failure to get a background check (9% of survey respondents)

Sometimes, a bad hire is made – face it. Here’s how tools like Ovation can help to minimize bad hires. When a company adopts a hiring tool, they can start recruiting (not necessarily hiring) year round. Use the hiring tool to create effective job descriptions. Outline specific expectations and responsibilities in the job post.

  • Use the hiring tool to create effective job descriptions. Outline specific expectations and responsibilities in the job post.
  • Keep job opportunities posted year round to have a continual pipeline of people who want to work for your company. Post the opportunities on your company website as well as job boards and social networks.
  • Get input from others in the company about what a position requires and what kind of person will most likely fit.
  • Have others, including line staff, participate in the interview process. Use the tool’s scheduling and internal workflow features to thoroughly vet a candidate.
  • Get a background check on all candidates and check their references.
  • Establish an orientation and training (O&T) period (say 90 days) for all new employees. After or during the O&T period, if the employee doesn’t work out for performance or ability to do the job, terminate them. All employees should be aware of the O&T policy to allow the company’s culture to accept or reject new hires.

“Whether it’s a negative attitude, lack of follow through or other concerns, the impact of a bad hire is significant,” said Rosemary Haefner, vice president of human resources at CareerBuilder. “Not only can it create productivity and morale issues, it can also affect the bottom line.”   Good advice.

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