cost of a bad hire

Everyone makes mistakes. It’s just human nature. But in business, few mistakes are more costly than hiring the wrong person. Those costs compound by the day and impact every aspect of your operation, so acting fast is crucial.

But don’t just take our word for it. Simply hiring and training a new employee can cost up to $240,000, according to the Society for Human Resource Management (SHRM), a considerable amount of money that’s now down the drain. Plus, your other team members now have to shoulder the burden of the bad hire’s workload. That can lead to burnout and turnover, which brings you back to the hiring process all over again.

In other words, the cost of a bad hire is pretty darn high — and it becomes even higher for each day you wait before taking action. In this article, you’ll learn:

How to deal with a bad hire quickly
How to evaluate your hiring process and determine what went wrong at each step, including:
• The job desctiption
• The interview process
• The training period

In the end, you’ll have a clear plan of action for addressing a bad hire and making sure it doesn’t happen again.

act fast.

The worst thing you can do after making a bad hire is to do nothing. Once you’ve exhausted every avenue for improving their performance, you need to get the bad apple off your team in a hurry. Leaving them in place can not only make more work for the rest of your team but also engender resentment and distrust among your direct reports.

If your bad hire didn’t work out because they simply didn’t have the right skills to perform on your team, consider whether they could be a better fit for another function within your organization. After all, you’ve already spent the time and money to hire them and get them acclimated to your company’s culture, so moving them to another team isn’t a total loss. If this is an option, determine who they would report to on the new team, and find out if that person is interested in taking your bad hire on — or if they even have open headcount. If the answer to both questions is “yes,” then begin the transition process as quickly as possible.

If, however, there’s no opportunity for reassignment — maybe there’s no matching role elsewhere in the company, or perhaps the hire is just a complete bust — then start the termination process ASAP. Work with your HR team or a professional recruiting specialist to build a plan for getting this person off your staff as fast as you can.

do a post-mortem.

You know what’s even worse than making a bad hire?

Doing it again.

Once you’ve removed the bad apple from your bunch, take the time to figure out how it happened in the first place so you can prevent it from happening again. There are three key areas where you and your team may have erred.

the job description.

Believe it or not, the brief cluster of bullet-pointed responsibilities you posted online months ago could have been the dealbreaker in this situation. After all, the description you post to a large degree determines the type of candidates who come knocking. You get the candidates you seek.

However, before you start typing up a description, be sure to take a step back and think holistically about the needs of your team and organization. Don’t rush to backfill for a recently departed full-time employee without first considering alternatives like shuffling organizational responsibilities or hiring temporary support through a staffing company.

Think hard about what your organization does — and doesn’t — need when writing job descriptions. For instance, overqualified hires, where more junior candidates would do just fine, come with higher salary requirements which could hurt your bottom line. That’s why writing precise job descriptions is so important.

the interview.

If you wrote a stellar job description, great. Perhaps the issue was the interview. Everyone knows that candidates need to prepare for interviews, but it’s equally crucial that you’re ready, as well.

Create a set of well-rounded questions and assessments that tackle all three aspects of the job: behavioral, situational and technical. Also, don’t forget to take your time with this process. Simply skimming through resumes for a few keywords or inviting candidates in for five-minute discussions won’t cut it. You need to be as thoughtful with your hiring process as you expect your next hires to be with their work.

And while finding someone who can get the job done is crucial, it’s important to evaluate candidates on how well they would fit in with the rest of the team, too. A bad fit can damage team morale, cut productivity and create a company culture that will put you at risk of losing other employees down the line. At Randstad, we follow a model of looking for job fit, boss fit and company fit when considering potential hires. You might benefit from applying this rubric the next time you hire.

the training period.

This can be hard to admit. What if the core issue isn’t the new hire after all, but the poorly designed and executed onboarding process at your company? No matter the level of experience, starting a new job is never an easy thing. From learning the intangibles of daily work expectations to absorbing company policies and procedures, there are a thousand things that need to be accounted for in order to successfully onboard employees.

Never assume that a new hire will be 100 percent ready to go by day two — or by days three, four or five, for that matter. Be open to questions, and most importantly, invite new hires to speak up if they have concerns or moments of confusion during the onboarding process. Consider creating a buddy system or initiating an open-door policy for the first few weeks.

the takeaway.

Making a bad hire is almost inevitable, but it’s also a learning opportunity — although a costly one, to be sure. With these tips in mind, you can act fast to curb the bad hire’s impact on your team and learn where you went wrong in the hiring process so it doesn’t happen again. It’s a mistake that you can’t afford to make twice.