How much is that bad hire costing your business?

Recruiting and hiring good employees is one of the most critical aspects of running a business. After all, hiring the wrong people can compromise your company's success in almost every part of your industry. According to the United States Bureau of Labor Statistics, the U.S. will add 4.7 million jobs between 2022 and 2032. And this means the possibility of making a bad hire in filling those roles. This article details the cost of a bad hire, what signs you should look for, and what you can do to avoid hiring the wrong person for the job.

What's the cost of a bad hire?

The cost of a bad hire can be at least 30% of the role's total salary and cause a loss of productivity, time, and hiring resources. Hiring someone can involve hours of reviewing resumes and conducting interviews. There are also the additional expenses of job ads, onboarding, and training.

The cost of a bad hire can also include the impact on employee morale and customer satisfaction. Employers report negative effects on the quality of work and company reputation. A bad hire can also result in unprofessional behavior, leading to complaints or allegations of a hostile work environment from other staff. And the legal fees to defend against these complaints can get expensive.

The cost of a bad hire can be at least 30% of the role's total salary and cause a loss of productivity, time, and hiring resources.

Signs of a potential bad hire

Qualified talent is different for every business, but there are some key signs of a bad hire. CareerBuilder's survey shows the following common traits of bad hires:

Unacceptable work
A negative attitude
Attendance issues
An inability to get along with or work well with others
Dishonesty about their skills or misleading recruiters during interviews

Another sign of a bad hire is asking for or expecting a promotion soon after starting. Being ambitious can be a positive quality, but some people overestimate their abilities and become resentful when they don't receive what they think they deserve. Even the most qualified, experienced candidates usually need at least two to three months on average to learn your policies and procedures and demonstrate their skills. Many promotions can take years, so someone who wants to level up without the effort could be a bad hire.

A bad hire may also require frequent help and reminders. Employees who don't try their best to learn new procedures and rules often repeatedly make the same mistakes. They may receive continual complaints from customers or clients. Some bad hires seem energetic, excited, and full of ideas during an interview and when they first start the job. But they don't try to apply their ideas or support the team beyond the basic job duties. You may even notice someone “quiet quitting" by doing the bare minimum of the job.

Preventing bad hires

Use these approaches to help avoid the cost of a bad hire.

Create detailed job descriptions

Listing all or most of the duties of the open role and describing the work environment in job descriptions is helpful. People are often disappointed when a job isn't what they expected, and they may quit or decide not to make much effort. For example, a person who thinks they'll be working in their own office probably won't be happy if the manager leads them to a cubicle or an open workspace on their first day.

Conduct thorough background checks

Background checks are essential to rule out candidates who could become bad hires. The background check company you choose should comply with the Fair Credit Reporting Act and have accreditation from the National Association of Professional Background Screeners. Before you start a background check, let the candidate know so they can withdraw their application if they no longer want to apply. Some states require written permission from a candidate and only allow you to start a background check after extending a job offer.

If you discover something in a background check that affects your decision not to hire someone, you must inform them so they can correct any inaccurate information. Asking for references when hiring for multiple roles is also a good idea.

Use in-person interviews

Digital conferencing and video calls are convenient but not the same as getting to know someone face-to-face. Unless the job duties are 100% remote, meeting potential candidates in person and ensuring their personality is compatible with the rest of the team is a good idea.

If possible, conduct interviews at the location where the new hire will work so they can see the environment they'll be working in. By preventing surprises, you're more likely to avoid the cost of a bad hire.

Involve your team

Gather input from staff who'll be working with the new hire. Let your team review top candidates' resumes, invite them to sit in on interviews, or discuss interviews after they conclude. Consider someone else if a manager or team member doesn't think the candidate is a good fit. Otherwise, your new hire might become a bad hire.

By recruiting the best candidates for the role and your organization, you can prevent the cost of a bad hire. With CareerBuilder's Pay Per Resume and Pay For Performance initiatives, you can eliminate errors in your business's recruitment processes, reduce costs, and avoid making a bad hire altogether.