What is the actual cost of a bad hire?

A bad hire can cost you a lot. How to avoid hiring bad employees.

  • A bad hire can cost anywhere from $17,000 to $240,000.
  • To avoid bad hires, you should favor objectivity over subjectiveness in your hiring process.
  • Avoid bad hires by determining the skill sets required for new employees, asking ability-based questions during interviews, and avoiding subjectivity as a last option.
  • This is a guide for hiring managers and business owners who want to reduce employee turnover and avoid making bad hires.

According to CareerBuilder’s 2016 study, the average cost of hiring the wrong employee is $17,000. According to research by the U.S. Department of Labor, the cost of hiring a lousy employee can be as high as $240,000, depending on the position and company. It’s essential to make the right choice the first time. But how can hiring managers ensure they are bringing in the right people? How to avoid making bad hiring decisions.

Avoiding bad hiring

The traditional hiring process is a straightforward one. Candidates apply for a job based on a vague description. Several are selected for interviews, and finally, only one candidate is chosen. What seemed to be the perfect fit can quickly turn into a hiring mistake. Rex Conner is a human resources consultant and the author of What If Common Sense Was Common Practice in Business. He told Business News Daily that the solution is simple: reduce subjectivity in the hiring process.

Conner stated that subjectivity is the biggest obstacle in hiring, onboarding, training, evaluating, and developing people. Conner said, “We have these absurd conversations where the interviewer asks a question like ‘What is your biggest weakness? ‘and (the answer) is ‘I work too much.’ This doesn’t say anything about the required skills.”

Understanding the skills required at the first step is crucial to avoid a hiring catastrophe. CareerBuilder reported that nearly 60% of bad employees failed because they could not perform the work level demanded by the employer. Conner gave the following advice to those rethinking their hiring process by focusing on demonstrable abilities and objective measures of candidates.

Two sets of skills are required: the prerequisites and the training.

The skills the candidate must be prepared to demonstrate at the interview are prerequisites. These skills are essential for the job and will not be taught to new employees. These skills range from general newsroom experience to expertise in audio engineering software programs. These skills will be acquired on the job. Prior experience is optional but desirable.

Interviews should be kept to a minimum.

Asking open-ended, non-specific questions will give you little insight. If you ask, “What experience do you have in coding this language?” you will learn more than if you asked, “What do you do when conflict arises at work?”

Make emotional ‘soft skills’ objective.

Qualities such as “cultural fit” or “team player” are subjective. Every company views a “team player” differently. Conner suggests breaking down these Soft Skills into their parts. What do you want to see in a candidate? Identify these qualities concretely, and ask yourself whether you can see them in your candidate. Asking interview questions to help you recognize these qualities in your candidates will also be helpful.

List the job requirements to narrow down your search.

It is essential to get candidates to narrow down your list. You can post the job requirements, like “willingness to travel” or “willingness to work weekends.” Another option is “willingness to work nights.”

Find out what went wrong the last time.

You’ve probably made lousy hiring decisions before. You can use your mistakes in selecting that person to inform your selection process. Ask objective questions about the aspects of the job if the lousy hire needs to possess specific critical skills for success. Ask all candidates about how long it takes them to complete particular tasks. Compare your candidates on these points to find the best new hire.

Contact the references you receive.

When a job candidate comes to an interview, they may boast about their skills. However, the candidate might need to be more skilled once on your team. Seek recommendations to avoid this disaster and the costs of a poor hire. These references will reveal the truth behind a candidate’s story. People will be honest with you because you won’t show what they tell you.

Do not rush the hiring process.

Hiring a new employee slowly is better than rushing to fill a vacancy. This will help you avoid making a mistake. A bad hire won’t solve your team’s problems. Your team may be thinner than usual with just one less employee, but there is a better solution. A quick hire will temporarily solve your problems, but you’ll end up back where you started. Avoid a bad hire that can cost you a lot of money by taking your time.

Only be subjective if you are stuck.

Conner told me you have all the information you need now. Subjectivity is still helpful if two candidates cannot agree after you’ve assessed their skills and determined their coachability for trained talents.

Conner explained that if we begin by not identifying all job requirements but only the specific skills needed on the job, the recruitment process will focus on finding someone with those skills. You tell them, “We need you to perform this task at this level and standard. If you can do it, then you qualify.”

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