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How to Prevent the Hidden Cost of Wrong Hires

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How to Prevent the Hidden Cost of Wrong Hires

Where did your business’ budget go?  

If you aren’t sure, take a look at your hiring process. Zappos CEO, Tony Hsieh, estimates his company’s loss from bad hires to be about $100 million! While that’s an extreme case, there are still measures that need to be taken to prevent the numerous pitfalls that can come of a bad hire (or twelve). Especially with high-paying roles in smaller companies, a wrong hire can be disastrous monetarily.

Here are some reasons why:

  • Onboarding costs about $240,000 per employee.
  • You have to replace the bad hire and do the process all over again.
  • Mostly all of the bad hire’s salary is money thrown out the window.
  • Time is money, and you are losing revenue by keeping them and replacing them.
  • Other employees experience burnout from making up for the bad hire’s slack, leading to disengagement and loss of productivity, if not major attrition rates.
  • The culture can be affected negatively, even when the negative influence is removed, creating less productivity and perpetuating future bad hires.

Don’t let it even happen. Prevent those money-sucking wrong hires with these four solutions.

1. Save time with talent pools.           

Have you ever had to make a decision on the spot and later regretted it? If you’re like most employers, your Human Resources (HR) team has experienced this. If all of the pressure is put on the HR department or external recruiter, this could lead to hasty decision-making. Instead, encourage a paced process, starting the sourcing tactics early.

It’s important to source all of the time, not just when you are actively looking to fill a position! Build rapport with interesting talent you think would mesh well with the company’s goals and values. The HR department/recruiters aren’t the only ones that can do this, either. Use a sourcing extension to allow for autofill of potential candidate data into your ATS (applicant tracking system). This way, everyone can pitch in to fill up talent pools with potential great hires. The hiring game is a fast-paced one, especially when top performers are sought after, so it pays to reach out quickly.           

2. Target the right candidates with employer branding.

Now that you are constantly sourcing and not waiting until the last minute to fill a position, it’s important that your brand exudes the environment that your company cultivates. Assuming you have a solid company culture in place, here are some tips to showcase that to potential candidates:

  • Inject employer branding into a careers’ site.
  • Keep copy consistent.
  • Use creative media, like team photos and videos.
  • Use employee testimonials.

If you portray the goals for the growth of your business to potential candidates, it’s less likely that people that don’t mesh with that will apply. This saves time and erases the opportunity to wrongly hire those people!

3. Optimise the hiring process.

Just as you should be constantly sourcing, you should also constantly be evaluating your hiring process. Identify points of weakness that affect time to hire or flaws in the interview questions. Work on these as you go. Don’t just stick to one hiring strategy and never fix it! Hiring needs are constantly changing, so it’s important that you keep up.

Hotjar is a great example of a company that continuously improves their recruitment strategy. Here are some techniques they suggest implementing:

  • Screening questions early on in the application.
  • Long surveys.
  • Identify ideal characteristics for a hire.
  • Refine your hiring preferences as you go.

4. Involve team members to eliminate biases.

As a culmination of all of the above techniques to avoid bad hires, make sure that the whole team is pitching in. Don’t force participation, but cultivate a culture where employees want to help with the hiring process for the good of the company. Everyone has biases, whether they are aware of them or not. Increasing the amount of input into a hiring decision decreases the influence these biases have on the hire, resulting in a better fit for the company.

With a collaborative hiring process, your business can make the best hiring decisions. If you source together and constantly, it will be more likely that you can avoid detrimental hires that cost you unnecessary money and time. Just remember, even if you have the hiring strategy down pat and a great team, don’t forget to continuously check in!

Constantly work on your hiring tactics together, and see your budget dwindle significantly less.

If you would like to discuss collaborative hiring with me get in touch below.

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