The Cost of a Bad Hire

Costs of a bad hire

Hiring the right candidate can change a company for the better. They can bring in new ideas and perspectives, help motivate other employees, and be a much-needed breath of fresh air. But hiring the wrong candidate? It can have a detrimental ripple effect on the rest of your company, and cost you a small fortune in terms of lost money, time, resources, and reputation.

Learning how to spot the candidates that won’t be a good fit, as well as learning how to sharpen your hiring team’s interview skills, can help make a difference when it comes to avoiding a bad hire.

What Hiring the Wrong Candidate Really Costs

Everyone knows that it costs money to recruit, hire, and on board an employee. But how much exactly? Try up to a quarter of a million dollars. Bad hires can cost even more if they end up needing to be replaced or if they drag you to court. What factors and variables contribute to this high number?

  • Advertising fees for listing the open position on multiple website
  • Paying staff to interview, onboard, and train new hires
  • Employee pay and maintenance
  • Negative impact on department or team performance
  • Time lost to disruption on projects and productivity
  • Lost business opportunities or customers
  • Injured employer reputation and brand
  • Paying staff to interview, onboard, and train a replacement hire
  • Incomplete projects
  • Severance
  • Legal fees

The Association for Talent Development estimates that companies and organizations within the United States have spent over a billion dollars a year on employee learning and development. While some of these instances can be contributed to general employee maintenance and common turnover, rather than a bad hire, there is still a need to learn how to find top talent and maintain it.

How Bad Hires Can Impact Your Company

In addition to costing your company money, bad hiring can disrupt many aspects within your company, including how it appears to everyone outside of it. The cost of a bad hire can extend beyond direct fiscal losses and affect other factors that may be more difficult to deal with.

Bad hires can have a contagious effect and end up undermining your company’s culture. If they slack off at work, the burden may fall onto good, hard-working employees to pick up the slack with neglected responsibilities. If it continues, it may breed resentment among employees, cause a decrease in overall productivity, and destroy team spirit and healthy collaboration. Team and company morale can start to suffer, especially if managers and other staff members may have to spend additional time dealing with the bad employee instead of focusing on their own work or managing their other employees.

Bad employees may cause a ripple effect that brings down the rest of your team. They can cause your best performers to get frustrated dealing with them every day, and end up looking for employment elsewhere. This could also cause good employees who have chosen to leave your company to also leave a bad review on sites like Glassdoor, which could in turn deter other potential applicants from applying in the future.

Stories about bad hires could spread within the company or even further, garnering attention online with a viral video or story. This can cause irreparable damage to your company’s reputation in moments, causing customers to take their business anywhere else.

6 Ways to Avoid Bad Hires

Given how much it can cost to interview, onboard, and retain employees, it’s clearly worth taking the time to learn how to improve your hiring process and how to avoid hiring the wrong person to begin with.

In most cases, the blame for hiring the wrong candidate should not with the bad employee but rather with the hiring team. In a recent CareerBuilder survey, respondents stated they lacked the skills needed to conduct a proper interview and do an effective job hiring candidates. Teaching your hiring team the art of the interview and giving them the tools they need to successfully navigate an interview can absolutely make the difference for consistently hiring the right person for the job from here on out.

What many people don’t understand is that hiring is an art. Having a standardized interview process can make your company five times less likely to end up with a bad hire, according to a 2015 acquisition study performed by the Brandon Hall Group.

Creating a standardized interview process is not difficult, but it does require continuous effort and dedication on the part of the team that will be handling interviews. The scope of the process extends from creating an online job posting to fully understanding what the position entails, and continuing to communicate even after the interview ends.

Here is how to avoid bad hires and strengthen your interview process:

  1. Make Detailed Job Postings

If you make generic and unclear job postings, you can’t be mad when you end up getting inundated with irrelevant resumes. Half of the work you’ll need to do to weed out under qualified candidates can be done by ensuring that your job listings are clear in their expectations and detailed to begin with, leaving no room for questions.

2. Know What You’re Hiring For

Before conducting an interview – and probably even before listing a vacancy – you should know what you are hiring for. Ensure that everybody on the hiring team is aligned in knowing what duties and goals are associated with the job. Everyone on your team should know the position you’re hiring for then interview candidates with that in mind. Focus on culture fit and the ability to learn and adapt more than their current set of skills.

If you know what you’re hiring for, it makes it much easier to see what you’re looking for in a candidate. Hire somebody who can do THE job, not A job.

3. Be Welcoming

Interviews are awkward for everyone involved. But you can alleviate tension by welcoming the candidate to the interview in a friendly but professional tone. Introduce yourself, offer them a cold drink, and maybe even crack a joke.

Though these small gestures may seem trivial, they are statistically likely to get the candidate to relax and open up more when answering your questions. Candidates will be far more likely to provide genuine answers to your interview questions, making it easier for you to assess them.

4. Ask the Right Questions

Time is money, so your hiring team should spend valuable interview time asking the right questions and properly engaging the candidate.

Some employers engage ineffective tactics during interviews, like asking obscure questions that don’t have anything to do with the position. Many interviewers are also guilty of asking overly difficult questions – also irrelevant to the specific position – to intimidate candidates. Worse yet are interviewers who ask lazy trick questions or tired generic questions they found online.

But even beyond that – who are the worst offenders? Those who don’t know how to ask the employee if they can do what the job itself entails, and what their experience is doing such. In an interview, there should be at least one person on your team that knows the ins and outs of the position, and can ask precise questions regarding it. They should be asking the candidate what their experience is with the associated job duties then be able to assess how quickly they think the candidate can start handling the work, and how easily they will be able to learn additional tasks as needed.

5. Communicate After the Interview

Once the interview has concluded, you and your team should communicate about what went well and what went poorly within the interview itself, not necessarily about the candidate. You should always be actively working to improve your interview process, to make it more efficient and more effective for the next interview.

6. Listen to Your Gut

Gut reactions can be a powerful hiring tool. Take a moment to check in with your gut feeling about an employee before hiring them. Were you on the fence about them before you brought them in for an interview? During their interview? After their interview? That could be a red flag.

If after the interview you are still unsure of the candidate, it may be a sign you shouldn’t hire them. Feel free to also check their references. Talking to people who have worked directly with the candidate can give you a feeling of how hard of a worker they are and how well they tend to fit in with other teams.

Dealing with Existing Employees That Aren’t A Good Fit

If the problem is a current bad employee, you might be struggling in figuring out how to handle them. You may be wondering if there is a way to fix the problem that doesn’t involve cutting your losses and firing them. Here are some things you should consider before taking that step:

Determine Why They’re Not A Good Fit

Are they a good worker but simply don’t fit with the company’s culture? Are they friendly but don’t get a lot of work done? Do they bring a bad attitude into work every day and let it spread to other employees, diminishing work output and ruining morale?

Finding out why the employee is causing an issue and trying to resolve instead of just firing them can benefit them and your company, and save you money. Talk with their manager or other employees to see if you can gain better insight.

Talk to Them

You can also pull the employee aside and address your concerns with them. This gives you the chance to hear their side of the story, and gain insight that way, which can make it easier for you to determine what you should do with them.

Perhaps they aren’t aware they are doing a bad job. Talking to them can help them learn expectations and give them a second chance to turn things around. Maybe they didn’t get the proper training, and their negative performance is simply a reflection of that. Maybe they just don’t like their work or their boss, and the solution could be as simple as transferring them to a different department.

There are plenty of ways to handle a bad employee that doesn’t always result in you having to fire and replace them. A bad employee has the potential to become a good employee.

How Diamond Peak Recruiting Can Help

Another way to help ensure you avoid bad hires is to rely on someone else’s expertise when it comes to staffing. In some instances, the people doing the hiring for a company may not know the ins and outs of the position they are hiring for. Or, perhaps, hiring isn’t their primary job task, and they may not know the best questions to ask during an interview. Each of these scenarios can result in hiring a candidate that is under-qualified, or one who is a poor match with the company’s culture.

At Diamond Peak, we have an extensive pre-screening process and work closely with clients throughout the interview process to ensure that each candidate is the person that they are looking for. Often during our pre-screening and interview processes, we – along with the client – are able to unearth red flags that prevent a client from making a bad hire.

Though our pre-screening process is one of the biggest advantages of working with us, we also have the ability to introduce clients to multiple qualified candidates. This allows clients to see a variety of potential candidates and get a feel for how they might fit within their organization. We ensure that the backgrounds of these candidates align with the needs of our clients, and by talking with multiple candidates with similar skill sets, our clients can more easily determine which candidate would be the best fit for their workplace environment.

You don’t have to settle for the first candidate that applies for the position. Here at Diamond Peak Recruiting, we can easily sort out under qualified and red-flag applicants, and bring you the best applicants the industry currently has to offer. Diamond Peak Recruiting focuses on AEC and MEP recruiting (Architecture, Engineering , Construction, Mechanical, Electrical, and Plumbing), so contact us today and let us help you recruit top talent for all of your construction and architecture recruiting needs.