What’s the actual cost to your company if you hire the wrong candidate? …$10 …$1,000 …$100,000?
“Bad Hire” cost estimates are all over the board and can vary dramatically by industry, job type and company. Some organizations rely on extremely complicated and in-depth formulas to examine the far reaching effects of this slightly intangible cost. While others just have the intrinsic sense that the number is most likely high, and should probably be avoided if at all possible.
Since most companies don’t have a resident cost of hiring algebra savant readily available, we asked a few members of Team Hyrell to share their thoughts on what they think is the biggest “cost” of a bad hire:
Director of Marketing, Michael Macking, says:
“There are many statistics to show the actual cost of a bad hire, but often it’s the intangible costs that are most obvious. There are costs to you reputation when the bad hire is interacting with your customers, costs to your culture and morale when your other employees interact with this bad hire and even costs to the your (the manager or owner) sanity when the effects of a bad hire force your focus away from legitimate business and towards internal “drama” and fixing problems you shouldn’t have had to deal with in the first place.”
Product Quality Manager, Angelo Santora, says:
“A bad hire requires more time spent training and possible recruiting/hiring. Now more than ever it pays to get it right the first time.”
Director of Business Development, Patrick Clark, says:
“Progress. Your goal, as a company, is always to make progress. You can define progress however you want (more sales, less support requests, better service, etc.) but making a bad hire brings that all to a halt. Bad hires kill progress. You’ve got to re-train, re-interview, re-hire. And that cycle chews up time, money and company momentum. If you want to make progress, make good hires.”
Sales Representative, Bill Wilson, says:
“The biggest cost of a bad hire is the wasted time onboarding and training the wrong person. It can take weeks (if not months) to get a new employee fully up to speed, and that time investment is only justified if the new employee becomes a productive, long term member of the team.
But when the wrong person is hired, managers and support staff invest a significant amount of time with the person that ends up being wasted, with nothing to show for their efforts. That’s why hiring the right person from the start is critical.”
Unfortunately, hiring can be messy. It can be viewed as a necessary evil (turnover) or as a result of growth (new hires). And there is no ‘perfect way’ to hire the best candidates. But there is hope. There is a logical path to reducing these costs. So how do you reduce the cost of bad hires? Make better hires. How do you make better hires? Use a better process. Use a smart process.