What’s the actual cost to your company if you hire the wrong candidate? …$10 …$1,000 …$100,000?
Estimates of the costs of a “Bad Hire” vary widely and can differ greatly depending on the industry, job type, and company. Some companies use complex formulas to assess the broad impacts of this somewhat unclear cost. Meanwhile, others just have a gut feeling that the cost is probably significant and should be avoided whenever 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:
Many statistics highlight the real costs of a bad hire, but the hidden costs are often more noticeable. A bad hire can hurt your reputation when they deal with customers, impact your workplace culture and morale when other employees interact with them, and even affect your (the manager’s or owner’s) peace of mind when the issues caused by a bad hire distract you from running your business and force you to handle problems that should not have arisen.
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.
