What is a bad hire?

What is a bad hire?

Hiring the right person for a vacancy is never an easy task, but dealing with a bad hire can be an even bigger challenge.

Most people only associate bad hires with employees who quickly leave the business. But, in truth, a bad hire could also be someone that is under-performing or is a poor cultural fit.

With recruitment often a timely and sometimes frustrating process, it’s understandable that companies sometimes make hasty decisions they come to regret, especially if you don’t have the resources or experience to properly vet a candidate.

The Impact of a bad hire

A bad hire can be costly to a business, firstly financially in terms of recruitment fees, salary and training investment. It takes significant time and energy to bring new employees up to speed with procedures and processes and get them up to speed and fully integrated into their new surroundings. Beyond that, once a bad hire was to leave, it costs more money to find a replacement as the whole recruitment and onboarding process is repeated.

• The average cost of a bad hire on a salary of £25,000 would be between £31,250 and £35,000.
• The average cost of a bad hire on a salary of £50,000 would be between £62,500 and £70,000.
• The average cost of a bad hire on a salary of £100,000 would be between £120,000 and £140,000.

As well as that, it can impact the existing team morale and productivity. While a bad hire is in place, they often won’t perform as expected and everyone in the team that relies on that person will be adversely affected. This can lead to more established and performing members of the team getting involved, which can burn them out and cause their own productivity to dip.

Arguably the most influential affect is the firm’s reputation in the market. If a company has high levels of staff turnover and struggles to retain employees, recruiting top talent becomes even more difficult than before. This is because prospective candidates will be influenced in their decision making by a firms EVP (Employee Value Proposition), and in a candidate driven market, it becomes a bigger challenge to secure the best talent to drive the businesses forward.

Why do bad hires happen?

Put simply, a bad hire often occurs because a company doesn’t have the time, resources or experience to properly vet a candidate. This stems from the recruitment process itself, a lack of proper, rigorous criteria inevitably leads to bad hires.

• 30% said that a bad hire came about because of the need to fill a vacancy as quickly as possible.
• 30% said that a bad hire occurred because the company had to recruit from a smaller pool of talent.
• 20% of respondents said that they weren’t sure how much their bad hire cost overall.

Especially in the finance & accountancy sector, it is important to remember that it is very much a candidate led market currently, so there are more job opportunities than qualified professionals. These can often lead to short and inadequate talent pools, so a business will act hastily to fill a vacancy as quickly as possible meaning unexperienced and under qualified candidates may be hired.

Now in some cases, flexing the criteria is required because the “ideal” candidate profile isn’t achievable. While it’s good to have an idea of the skills and personality traits that you want to see in a hire, looking only for those candidates while discarding those who don’t fit the profile perfectly is a surefire way to limit your options.

The interview process is a critical part of the recruitment process to gain first impressions and a decent idea of the candidate’s skillset and begin to set expectations. From an interviewer’s perspective, poor candidate evaluation in terms of experience and personality traits can lead to misalignment in what is expected of a candidate against what they are capable of.

From the interview process, a candidate will want to gather a fine understanding of the requirements of an opportunity. If false promises are set or is mis-sold, it doesn’t bode well as a new hire will lose trust in their new employer form the get-go and will become dissatisfied very quickly as expectations aren’t being achieved. Most commonly, it is the day-to-day responsibilities or career promotions where employers over promise as employers believe it is what the candidate wants to hear when in reality the employer can’t provide on the promise.

So, what can hiring managers do to avoid bad hires?

It all leads back to the recruitment process, being clear and steadfast in what is required. From the start of the recruitment process, being sure in what you need and want in an ideal candidate allows for a sturdier pool of applicable candidates. This then leads onto the job role itself and day-to-day tasks, ensuring the hiring manager understands the purpose of the role in the business and what that would look like to prospective candidates.

During the interview stage, a detailed and comprehensive chat allows the hiring manager to gain a solid understanding of the candidates experience and learn more about their personality traits. On the flip side, a candidate will be keen to learn as much as they can about the job opportunity, and being as honest and transparent as possible will allow for better informed decision making.

Throughout this process, don’t overlook red flags as initial gut feeling is important. As much as asking the right questions is key to getting to know potential hires, any areas a hiring manager isn’t comfortable with should be addressed appropriately. For example, if a candidate is late to an interview, it is an immediate red flag and their maybe an explanation, however not addressing it becomes an immediate risk of being a bad hire.

Being fully confident in a hire is crucial to ensure success. To support CV’s and interviews, some businesses will add a test element to their recruitment process. This can either be a skills test or a characteristic test just to support any decision.

Finals Thoughts…

Making a bad hire is an expensive mistake. Getting the recruitment process right and consistent is crucial in avoiding this mistake. If you are falling foul to regular bad hires, it is most certainly time to freshen up your end-to-end hiring processes.

While we might be a tad biased, fundamentally a recruitment agency is able to provide support at every level of the process. They can offer a wealth of experience around hiring and screening, provide access to a much deeper talent pool (including the passive market) and ensure a more personal level of support.