Rapid Learning for Leaders: The True Cost of a Bad Hire

The point underscored by these two articles? Making bad hires is more costly than you think. What have you found? See what Barry Shamis thinks next week. A couple nuggets to chew on before then:

ONE

The True Cost Of A Bad Hire — It’s More Than You Think by Falon Fatemi, founder and CEO of Node:

• Recruiter Jörgen Sundberg puts the cost of on-boarding an employee at $240,000.
• According to the U.S. Department of Labor, the price of a bad hire is at least 30 percent of the employee’s first-year earnings. For a small company, a five-figure investment in the wrong person is a threat to the business.
• While the financial impact is quantifiable, chief financial officers actually rank a bad hire’s morale and productivity impacts ahead of monetary losses. Why? A bad apple spoils the bunch, so to speak. Disengagement is contagious, which may be why employers can’t seem to defeat it.
• Since Gallup began tracking employee engagement in 2000, less than one-third of U.S. employees report being enthusiastically involved and committed to their work.

Fatemi urges, “Go with your gut” when hiring. I suggest you challenge your gut after hearing Barry Shamis speak next week.

TWO

What Is The True Cost of Hiring a Bad Employee by Jörgen Sundberg, CEO of Link Humans:

“We all know that hiring the wrong employees can cost organizations a huge amount of money, but this infographic (bottom of post) presents some startling figures.”

• When hiring a new employee, double check that the job description (JD) outlines exactly what you want before posting the opening and really sell what your business can offer top candidates to attract the best people.
• As important as the technical skills are to complete the job, it’s also crucial to assess how well the individual would fit into your environment.
• If their personality does not suit your organization, it is unlikely that they will stay for long and it may cause conflicts amongst your team. If you’re not sure about a candidate, ask other members of staff to help you to make the decision.
• Don’t just hire anyone to fill the spot, it’s best to take your time over hiring decisions and consider it carefully to ensure that you find the right candidate for the position.

Sundberg only mentions a JD. I suggest you ask Barry Shamis why a JD isn’t enough. Ask him why a Success Profile ensures a better hire.

Remember that Will Rogers sally? “Good judgment comes from experience, and a lot of that comes from bad judgment.” What’s your most expensive hiring mistake? What will you different next time? How might you improve your hiring judgment?