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The toughest decisions a manager makes are the decisions about people—hiring, firing, and promoting people. Often, those decisions don’t get enough attention and are difficult to undo. In fact, most managers simply resign themself to the idea that every company has to tolerate some sub-par employees. But that’s not necessarily the case. And making a bad hire has a higher cost than you might think. Here are the results of making a bad hire.

Immediate effects

When you make a bad hire, the results are immediate. It might mean low productivity. It might mean a lack of initiative, meaning that you have to spend your precious time directing then. Or it might mean that there are days when they show up late or not at all. You might be losing sales revenue, losing once-loyal customers, or wasting the time of your other employees while they try and compensate for the duties your bad hire has neglected.

The cost of replacing

When you finally decide that it’s time to replace your bad hire, it’s estimated that you’ll spend an average of 21% of their annual salary. You have to pay for the cost of advertising, screening and interviewing by human resources, management, or a staffing agency. Next you have to pay for onboarding, training, and any extra oversight a new employee might require. And an external hire costs anywhere between 18 and 20% more than hiring internally.

Lost productivity

And while your managers are spending their valuable time scanning resumes, interviewing candidates, and deciding on the process, they’re losing time they could be spending on more productive tasks and that they would be able to accomplish if you hadn’t made a bad hire in the first place. Meanwhile your other employees are spreading themselves thin, trying to cover some of the duties that are being forgotten by the hiring process. Eventually, this can lead to frustration, resentment, and low morale.

The real cost of deficiencies

And there are other, intangible costs that are difficult to measure. When you make a noticeably bad hire, the rest of your team starts to question your decision-making ability. They might even lose respect for you. If they’re frustrated or disenchanted enough, they might even look for employment elsewhere. In other words, those mediocre and sub-par employees are chasing your all-star employees away.

A missing superstar

And for each mediocre employee that you hire, it’s one less all-star employee that you can bring on board. So you’ll be missing out on that natural talent, their passion and motivation, and an eagerness to learn. When you come across those special employees, you need to welcome them! Provide them with training and leadership, award credit and praise when warranted. Incentivize them with rewards and bonuses and set the expectation that all your employees can perform to the same standard.

For more tips on hiring the most talented and passionate candidates for your company, contact Pridestaff Thousand Oaks today.

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