Despite a thorough recruitment process, companies can still end up hiring the wrong person. But what exactly is the cost of a bad hire?
What 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.
Not just financial.
The wage costs are just one factor, but a bad hire can have bigger implications for the organisational culture.
Many CFOs believe that the impact a bad hire has on morale and the work rate of your team is far more detrimental than the hit to your bottom line. Employee disengagement is contagious. A poor performer will lower the bar for others and your top performers may be resentful at carrying the weight of the work.
As a hiring manager with a vacancy, 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, boosting both your team morale and your profit margin.
Use the probationary period well.
Many employees have a probationary period before they cement their contract. We would suggest that this time is used rigorously. Expose your new hire to as people, situations and learning environments as possible. This will highlight both their ability to do their job and their skills in collaboration and team working.
Use References.
Once you have a suitable candidate make sure you follow up with the employee references your candidate provides.
Many former employers only give references that confirm dates and job titles. This has caused some to question the usefulness of references.
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. 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.
Get an outside opinion.
Bringing in a third-party perspective can be an invaluable, cost-free resource. This is especially important if your team is small and the role you are hiring for will cross teams. “Meet the Team” stage interviews can be useful. Getting a range of opinions from across the organisation will broaden your perspective or confirm your current view.
Use the interview process effectively.
An effective and rigorous interview process usually involves both 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 can better assess capability and determine how their methods will “fit” alongside the current team and the wider company model.
Offer clear expectations.
Limit the scope for a bad hire by giving the candidate clear guidelines regarding the role, their responsibilities and your expectations as an employer.
For example, if the role is KPI-based ensuring your candidates understand this before accepting an offer is critical. 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.
Using these damage limitation techniques will halt 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 talent. By offering a clear portrait of your company through your branding, you can ensure applicants receive 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 should outline 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’.
Use a recruitment partner to avoid the cost of a bad hire.
Using a specialist recruitment partner like us here at Ignite will help you make the right-first-time hire. Our wealth of industry experience and extensive network means we have access to the best UK digital and tech talent.
Read our blog to learn all about how we work and how we can help you fill your role, no matter how tricky the skillset!
