How Do I Avoid a Bad Hire?

Two men by a windowHow many times have you seen hiring managers settle for a bad hire when hiring in this market of high demand and fewer actively seeking resources? Logically, they know they need a great resource but they choose to hire an under-qualified referral or the first available applicant to quickly fill a gap or timeline rather than finding the right candidate. You wouldn’t buy a bicycle and expect the performance of a motorcycle so why would you hire a Manager of Operations that is missing critical skills to meet the demands of your COO opening?

According to the US Department of Labor, the cost of a bad hire is estimated at 30% of that person’s salary.

It’s easy to see the long-term loss in the example of hiring an under-qualified COO after adding up the potential liabilities of bad attrition, effort refilling those gaps, a shift in culture and/or productivity, etc. What isn’t as obvious is the collective cost of rationalizing a mediocre office manager. It takes effort and time to track the cost of projects delayed, poor customer service, lack of ownership or other impacts across an organization that has a poor hiring strategy. If you assumed a potential 50% loss of first year income on every new hire, would those dollars add up to less than the cost of investing in a good strategy?

As a hiring manager, there are several things you can do to save your company the time, energy and cost of making a bad hire, including:

  • Invest in a more insightful and thorough interview strategy. Don’t focus the interviews on your scripted questions you have used on every hire for the last decade. Ask questions that get people talking as individuals. Get to know them as a person.
  • Put some data behind your decisions. Do your best to recognize there will be bias in a decision and your gut-feel could be wrong. Taking the time to speak with verified references, using relevant skills or cultural assessments can help you see parts of the story you missed
  • You get what you pay for. If you aren’t able to locate the right talent, you may need to hire a recruiter to help evaluate the role and/or identify a candidate pool. It may sound expensive but if you invest in finding a quality hire, it will save you money and other resources in the long-run.
  • Job posts only work if A-players are looking for them. In this hiring market with every company trying to retain their best employees, what percentage of great talent is actively looking at job boards? Hiring today requires a multi-pronged approach leveraging social media, employer branding, employee referral programs, recruiters, if needed, but most importantly…a reason for people to want to work for you versus your competition.
  • Don’t hire without a thorough plan to make this person successful. If you are unclear on the metrics and tasks associated with being successful in this role, you will inevitably ask generic interview questions. Take the time to understand your plan and ensure your interview is directly addressing the specific position.
  • Onboarding a new hire starts with how you welcome interviewing candidates at the front desk. If you aren’t putting your best foot forward to make candidates feel welcome, you may miss out on the best candidate telling their story because they are uncomfortable.
  • Retaining your teams. Keeping your talent long-term by offering them the very best work experience you can will help to create a proactive referral source and increase internal promotions to fill your critical needs.

People have options in a strong economy. Be their best option and your story will attract other great hires.

It so easy and common to rationalize hiring an average candidate. Not knowing the true cost of a bad hire can create a snowball effect of bad decisions when developing a strategy to attract and retain great people. Like anything else, saving a little time or money on the front end can result in unintended consequences of making the wrong decision long-term. With more investment and a solidified approach upfront, you reduce your chances of selecting a bad hire, save valuable resources and increase employee retention within your company.


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