Poor recruitment decisions often occur when there is pressure to fill a position quickly, and therefore corners are cut during the recruitment process.
While there is always a risk when hiring a new employee, a robust recruitment & selection approach can help to mitigate this risk by verifying information provided and objectively assessing candidates, rather than finding out about issues afterwards.
Before recruiting for your next hire, I would suggest that all business owners consider the impact of the following costs and consequences to your business:
- Lost Productivity
This is the biggest problem with recruiting the wrong person. Bad hires may be ineffective and unproductive, which can cause you to face slowdowns in reaching your goals.
You may have projects with deadlines, but if all of your employees are not on board and working together, you may miss those deadlines and have to face unsatisfied clients.
When faced with a struggling colleague, other employees may start assuming other duties which aren’t really in their job description. This not only impacts their own productivity at work, but their ability to keep appointments, hit targets and maintain standards.
- Damaged Client Reputation
Your clients have high expectations from your business, an under-achieving employee can make mistakes and prove costly and might overlook necessary details that result in poor customer service.
Even if they get their work on time, if it is not of good quality, a client may end up leaving you. One bad hire can lead to quite a few lost clients.
Also, disgruntled former clients may end up writing bad reviews about you, which can affect your reputation and your ability to attract new clients.
- Damaged Employer Reputation
A bad employee who is disgruntled because you fired them for not being productive may end up writing a bad review on a job hiring site such as Glassdoor, reducing your company ratings, which could hinder your efforts to replace them, not to mention damaging your employer brand.
This is something that most business owners don’t think about.
- Damaged Teamwork & Morale
One bad apple ruins the bunch, as they say. When all of your team members work together and focus on the same missions, goals, and values, your company will be able to be productive and get things done.
On the other hand, a bad hire who has a negative attitude towards work can have a knock-on effect on staff morale. If they are unable to fit seamlessly into existing teams and get on with their colleagues, it can ruin the atmosphere in the office. This potentially impacts on how much employees enjoy doing their jobs and the likelihood they will stay with the business for the long term.
- Lost Time Managing a Bad Hire
In my experience, most business leaders don’t fire that bad hire right away. Many will first try to get their employees to be more productive and get on board with the team. However, this can result in lost time and employee turnover.
The time you spend supervising bad employees could have been used for more important things. Time is money.
- Recruitment Costs
It costs money to hire employees and then replace them. Businesses need to create job descriptions, advertise roles, read through CVs and application forms, and carry out interviews and assessment processes. All the while, they may be operating short-staffed due to a lack of capacity in the office. Even after the new employee joins a company, there is onboarding expenditure to consider, plus the fact the recruit may not be as productive as the experienced person they replaced.
To overcome a wrong recruitment mistake, it may be necessary to reallocate people and resources, invest in further training, or in the most serious instances, let the employee go. Even then, there are further costs to be incurred in terms of re-recruiting for the position. Essentially you are back to square one, with a position still to fill.
- Training Costs
When you hire a replacement, you may need them to quickly get to work on the projects that the bad hire was working on. You may need to invest a lot of money into training them and providing them with the knowledge and tools they need to be good employees.
Even if they are dedicated, they might need help with the learning curve to develop the necessary skills shortening the onboarding process.
- Legal Fees
Not as common, but if you have to let an employee go because they are bringing down the team and disrupting your progress, you may face legal recourse.
This means that you will end up with high costs on legal fees. By avoiding hiring bad candidates in the first place, you can prevent this from happening.
Any business can hire a bad apple. It’s not easy finding qualified candidates that are high performers, so there’s no reason to beat yourself up about it.
However, it is important to realize the true consequences and costs of hiring the wrong person.
Implementing a robust recruitment process and being very selective with who you recruit can significantly improve the probability of hiring the right people for your business.