When it comes to hiring a new employee, pressure is well and truly on to fill the position quickly. However, by rushing the process, chances are you won’t find the best candidate for the job and a bad hire can have a series of negative implications for the organisation.
Though there is always an element of risk when hiring a new member of staff and you can never know for sure whether someone will be the perfect fit for a role before they start, making a hiring decision should involve a lot of consideration. Not only can hiring the wrong person cause a disruption among the team, but it can also have sever financial repercussions.
Next Generation have put together this video which outlines the true cost of a bad hire, from the salary, to lost business.
The financial cost
- The average cost of a bad hire is 30% of the employees first year earnings.
- 10% of sales opportunities are lost.
- 27% of UK companies said that bad hires cost them more than £50,000
The effect on productivity
- Hiring the wrong person can cause a 36% drop in productivity.
- Hiring a replacement is time consuming, causing 40% lost time, recruiting and training the new person.
The cultural damage
- It can disrupt the team dynamics and has potential to cause a 32% drop in employee morale.
- It can also be damaging for client relationships.
How to avoid a bad hire
- Thorough preparation: Write a candid and detailed job description, so that candidates know exactly what the role entails. Be prepared to dedicate time to making the right hiring decision.
- Effective interviews: Assess the candidate against specific criteria that is essential for the role your are hiring for. Evaluate not only their skills and experience, but also whether they’re a good cultural fit for the company.
- Psychometric tests: 18% of companies currently do psychometric tests and they could be the answer to finding well suited candidates.