Despite a thorough recruitment process, companies can still end up hiring the wrong person. But what exactly is the cost of a bad hire?
According to The REC, 2 of every 5 job vacancies recruited by UK corporations are filled by the wrong people. Take a mid manager level with a salary of £42,000 for instance. It is estimated that these “bad hire” decisions can cost a business more than £132,000. The waste of the wage is just one contributory cost factor, however. The monetary impact is quantifiable, but how do these decisions affect the culture of your environment?
Many CFOs believe that the impact a bad hire has on the morale and the work rate of your team to be far more detrimental than the hit to your bottom line. Employee disengagement is contagious. A poor performer will lower the bar for others. Additionally, your top performers will feel resentful at having to carry the weight of the work.
As a hiring manager with a vacancy to fill, what can you do to minimise the chances of making a poor HR decision and incurring the cost of a bad hire?
We explore some strategies you can employ to ensure you add value to your business. By implementing these you can boost both your team morale and your profit margin.
Trust your Gut.
Hindsight is a wonderful thing. When reflecting on a bad hire, it is common to recognise that you had misgivings from the beginning.
At each stage, take a moment to assess your candidate. If your gut tells you something doesn’t add up, then in all likelihood…something doesn’t add up! Trust these feelings and act upon them. Don’t be afraid to reject a candidate based on your instincts. They are rarely wrong. If something (or someone) is too good to be true, then they most likely are. It’s important to recognise that you ARE able to rectify a bad hire before it permeates through your team.
In most cases, employees have to go through a trial period of employment before you cement their contract. Ee would suggest that this time is used rigorously. Almost every hiring manager admits to making a poor hire at some point in their career. This is not a reflection on your professionalism or capabilities. The real indicator of your skills is the ability to recognise your mistake and take the steps to rectify it.
Once you have a suitable candidate make sure you DO follow up with the employee references your candidate provides. You may also wish to consider using the social media accounts of your applicants as part of the screening process. From less formal platforms such as Facebook or Instagram, you will be able to gather a wealth of information. Not only about the professional conduct of your applicant but also their personal suitability from their posts and comments.
Warnings signs you may wish to look out for are:
- Negative or defamatory posts regarding previous employers or colleagues,
- Illegal drug and/or excessive alcohol use
- Inappropriate or explicit photographs.
Whilst these are not indicators of the inability to perform adequately in a role per se, they will certainly give clues as to the work ethic of your candidate. As well as their ability to slide into your current team and company culture.
Professional networks such as LinkedIn will allow you to background check a CV, and review professional endorsements. Professional arenas, especially in the technical space are often niche communities. As a result, it is likely that you and your candidate share contacts. If this is the case, you may be able to reach out and use these links as an extra resource.
An outside opinion.
Bringing in a third-party perspective can be an invaluable, cost-free resource. Having the opinion of someone a little further removed from the process will allow you to harness an objective opinion. This is especially important if your team is small and the role for which you are employing will cross teams. You don’t want to fall into the trap of employing the “best of a bad bunch”. If the vacancy has been open for a prolonged period or you have a particular deadline on the horizon it may be tempting to hire someone quickly. Although a quick hire may solve a short term problem, you may be opening yourself up to more problems. It is worth holding out for the right person.
Use the interview process effectively.
Plan and implement an effective and rigorous interview process. Use a melting pot of competency-based questions and “real-time” assessment tasks. This will allow you to capture the true nature of a candidate’s thought process and implementation strategies. You will be able to see how their methods will “fit” alongside the current team and the wider company model.
Invite them in to meet the team as part of the recruitment model. You will gain an idea about their cultural suitability whilst also being able to gather the insights of your colleagues. It is them that will have to work alongside after all.
If you wanted to be as sure as you can possibly be, you could even take a leaf out of the book of Weebly. They require a candidate to trial for a week before they offer a successful candidate a full-time, permanent contract. Such strategies may seem a little OTT, but we argue that you will place more value on your role this way. The candidate will feel as though they have really earned their spot and will have an invested interest in the company before they begin. This added respect for the position and their new colleagues will result in a more energised and motivated individual.
It will also be of benefit to the candidate too. By opening your doors, they will gain an insight into YOUR ethos. They will be in a better position to discern if the role and the organisation are a good fit for them. Costly and disruptive, early resignations are to be avoided if at all possible.
Offer clear expectations.
Limit the scope for a bad hire by giving the candidate clear guidelines upon the role, their responsibilities and your expectations as an employer. If the role is KPI based, making sure your candidates understand these prior to accepting an offer is instrumental. This “eyes wide open” strategy will eliminate any grey areas around performance and personal conduct.
Should an employee fail to live up to these agreements, we recommend that you follow your company performance and disciplinary procedure rigorously and effectively without delay. By employing these damage limitation techniques, you are able to call a halt to any disruptive behaviours or poor performance. It is important to stop them before they permeate your team and affect your bottom line.
Consider your branding.
A massive part of avoiding a bad hire is attracting the right calibre of talent in the initial instance. By offering a clear portrait of your company through your branding, you can ensure that applicants get the right message. They are then able to assess their suitability before they even apply.
Some things to think about…
- Instagram feeds should transmit your company ethos effectively. They should give a more informal visual about the team, their activities and your office environment.
- Company LinkedIn profiles need to offer a comprehensive outline of what you do and the space you occupy.
- Facebook and Twitter accounts should offer a segway. They are a place to share industry news and insightful comments using your company ‘voice’.
Be aware of current job search trends
It is undeniable that the way in which modern job seekers hunt out and apply for new opportunities has changed. In order to be visible to the best recruits, with the most up to date skill sets, you may need to adjust your recruitment strategy.
To avoid attracting the wrong candidates you will need to think about:
- Your job advert needs to convert to the ‘small screen’. By this we mean they need to be visible to the search engines and the job boards from mobile, tablet and App platforms. For more guidance on how to write an effective job advert which will convert to applications, you can read our insights here.
- Recognise that the Higher Education environment has evolved. Many HE institutions that were formerly known as polytechnics now offer computer science qualifications for example. These graduates were often previously rejected in favour of those from red-brick institutions. Deloitte are just one of the big-name organisations who are opting for a university blind approach within their recruitment process. As a result, are able to mine an increased volume of tech talent who in earlier times would have been overlooked.
- The best recruits are not out of work for long. Therefore it is crucial that you offer a model of recruitment that is effective and speedy. However, this should avoid compromising your ability to be thorough. By keeping the amount of time BETWEEN each stage short, you’re able to offer a fluid process that remains rigorous. In short, do not keep your applicants hanging on. Recognise that the great candidates will have other offers on the table. Do not leave yourself with a bad hire as your only option.
Use a recruitment partner to avoid the cost of a bad hire.
A bad hire may stem from the need to rush the process. They could just the simple fact that HR are not fully equipped to recruit for the role in question.
This is especially true if the vacancy is one of a technical nature or requires a specific industry specialism. As the world becomes more and more digitalised, it will be necessary for all areas of the business to expand. Businesses need to employ roles that are technical in nature if they wish to remain profitable and relevant. HR departments, however skilled at recruiting, will not always be aware of what a great candidate “looks like” within the digital arena. Particular tech stacks of an engineer, for example, maybe a foreign language to many talent acquisition teams. Therefore it becomes more likely that bad hires will occur.
In these instances, we would advise that to outsource your recruitment to a specialist recruiter would be wise. Your specialist recruitment partner should be fully equipped to advise you about the ‘profile’ of your ideal candidate. In addition to this, they will have a wealth of connections at their fingertips. Often, the best candidates are passive candidates. By this, we mean those who are not actively seeking new opportunities. Your recruiter has access to these, and are able to approach the elite directly.
A bad hire may also occur due to the fact that you are busy, and that you are having to rush the process. In situations such as this, a specialist recruiter may address your recruitment struggles and will remove the burden of recruitment. They will pre-screen your applicants for you to ensure that you’re only presented with candidates worthy of an interview.
By screening CVs, scheduling interviews and giving candidate feedback they are able to streamline the process for you. They will give your role the attention it requires. It will be filled in good time by the correct individual. For more information about the benefits of using a specialist recruiter to your business, read our article here.
Considering the dirty footprint a bad hire can leave on your business, it is imperative that you do all you can to avoid one. By integrating the above touchpoints into your approach, you’re doing all you can to protect your business and your team.
We hope you found this article on the cost of a bad hire useful. Do you have a digital or technical role which you are looking to fill? Maybe you are struggling to attract the calibre of candidate you need. Perhaps you have been plagued by previous bad hires. Maybe we are able to help. We are specialists in the recruitment of digital, data and tech roles, and would love to chat about the needs of your business.