logo image

ATD Blog

The High Cost of Hiring the Wrong Person

By

Tue Oct 20 2015

Loading...
The High Cost of Hiring the Wrong Person-765b512904518039c19266b60ae28636ccf053169625d5c1b334548a510e101c

Given the increasing competition among companies for skilled employees, managers may be tempted to hurry through some steps of the hiring process and skipping others altogether. After all, firms don’t want to lose their top candidates to other organizations.

The problem is that this could wind up being a big mistake. While it’s true that companies that unnecessarily drag out the process risk losing their top choices to the competition, being in too big of a hurry invites something worse: making a bad hire.

Advertisement

There are many reasons a person might not be a good match for a job. For example, someone might not have the requisite skills, or another candidate might not have the right personality for the position. In a recent Robert Half survey of human resource managers, 66 percent of respondents said they had eventually lost an employee because he wasn’t suited for the workplace environment in the first place. Hiring mistakes like that come with a price tag.

What’s more, the cost isn’t purely dollars lost. Costs of a bad hire also include at least three more components.

Team Morale Suffers

In a Robert Half survey of chief financial officers (CFOs) across the United States, 39 percent of respondents cited lower staff morale as the biggest impact of a poor hiring decision. It’s easy to see why. When one employee can’t adequately perform his or her duties, everyone else has to pick up the slack. They also often have to redo work that wasn’t handled properly in the first place.

This can lead to frustration and burnout, as employees are forced to add projects to an already full workload. Some staff will even see the bad hire as a reason to question management’s judgment and will start to doubt the company’s leadership.

Staff Productivity Declines

In the old days, when a company made hiring mistakes, it would just “find a place” for the underachievers where they couldn’t do too much damage. Those days are long over. Given the pace and pressure of business today, everyone has to carry his share of the load. If people aren’t performing their job responsibilities well and working together effectively, the firm’s competitive edge and high quality standards may be jeopardized. So it’s no surprise that 34 percent of CFOs in the Robert Half survey said the greatest cost of a bad hire is lost productivity.

Advertisement

In addition, bad hires typically have to be let go, which puts the company back in recruitment mode. In many organizations, it takes at least a month to bring someone new on board. That means that even after the poor performer is gone, a firm can suffer from lost revenues, overwhelmed and burned-out workers, and missed opportunities until a new hire can come on board.

Managers Lose Time

If you’ve ever supervised a poorly performing employee, you know how time-consuming it can be. When one of your team members isn’t living up to expectations, you’re always checking his work, retraining him on basic skills, correcting his mistakes, and redistributing the tasks he wasn’t able to complete.

That kind of extra supervision can eat up a lot of a manager’s day, taking her away from regular duties and stalling important projects. It’s a particular problem in today’s workplace, where there are fewer levels of supervision and employees must be able to fulfill their job duties without a lot of handholding.

There’s no denying hiring mistakes cost an organization in dollars. But when you add up the money spent on recruitment, onboarding and training, salary and benefits, and severance for an employee who doesn’t work out, the number can be quite significant. Considering the other costs of a bad hire as well makes it imperative to follow a careful and efficient recruiting process to find the candidate who’s the best match for the job.

For more advice on how to improve your organization’s hiring practices in practical and cost-effective ways, attend Hiring the Right People, an ATD virtual event on December 3, 2015. Facilitators will provide practical, hands-on solutions to help you pinpoint the skills and personality attributes that are needed to succeed in a given position or organization.

Advertisement

You've Reached ATD Member-only Content

Become an ATD member to continue

Already a member?Sign In

Advertisement

Copyright © 2024 ATD

ASTD changed its name to ATD to meet the growing needs of a dynamic, global profession.

Terms of UsePrivacy NoticeCookie Policy