How Much Does a Bad Hire Cost Your Business?
Maybe you were in a hurry to fill a vacant position and selected a less-than-ideal job seeker for a role. Perhaps you weren’t as diligent in your screening process, resulting in a poor selection, or simply discovered after the person began to work at your company that they weren’t the strong match you originally believed them to be.
Regardless of the events leading to a bad hire, now you must deal with the situation. A poor fit can harm productivity and lead to increased expenses in areas like training or even steal valuable time from the position’s manager’s workday.
Ultimately, struggling to keep a poor performer on staff can actually cost you more than replacing them in the long-run, making it vital you find the ideal fit the first time, every time.
If you are wondering how much a bad hire costs your business, here’s what you need to know.
A Bad Hire Directly Impacts Your Bottom Line
Some companies are hesitant to fire an employee who isn’t working out, especially if they have recently joined the organization. After all, the recruitment and hiring processes come with a price tag, and avoiding that expense may seem like a smart move.
While replacing a worker typically incurs a cost equaling approximately 21 percent of the person’s salary, keeping them onboard may be even more expensive. A bad hire isn’t usually very productive, reducing the amount of value provided by the position when compared to an ideal candidate working in the role, but the damage goes further.
A poor performer can also drag their team down, harming morale and the speed or quality of outputs, hurting your bottom line even further. Your team that works with the bad hire may also become frustrated, leading them to seek out opportunities elsewhere, potentially with your competitors.
How to Eliminate Bad Hiring Decisions
If you find yourself dealing with a bad hire, then it’s wise to act swiftly. When it’s obvious the person isn’t going to work out, don’t hesitate to terminate their employment. While this can be a difficult step to take, it’s often best for the organization. Sure, you’ll be short-handed for a while, but it also gives you the chance to find someone who is genuinely a good fit for the role, leading to gains down the road.
If you can prevent a bad hire in the first place, you’re in a better position. Use a robust screening process to make sure the person has the skills, experiences and personality to excel in your workplace. Often, this includes thorough reference checks, a comprehensive interview, and a willingness to turn a job seeker down, no matter how badly you want to fill the job.
You can also take it a step further by partnering with a reputable recruitment agency. Not only do they have a large pool of high-quality candidates, some of whom may be pre-screened, but they can also offer contract-to-hire arrangements, allowing you to bring the job seeker onboard for further evaluation before they officially join your staff.
If you want to learn more about how partnering with the right staffing firm can benefit your business, the professionals at VB can help. Contact us to find out more about our services and see how our recruitment and hiring expertise can benefit you.