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 organization.
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 disruption among the team, but it can also have severe financial repercussions.
Next Generation has 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 employee’s 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 the potential to cause a 32% drop in employee morale.
- It can also be damaging to 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 you 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.