3 in 4 Small Business Employers Have Hired the Wrong Person

Have you ever hired someone for your small business, only to find out shortly thereafter that you’ve made a mistake? You’re far from alone: According to a new CareerBuilder survey, nearly three in four small business employers (74 percent) say they’ve hired the wrong person for a position.

Hiring mistakes aren’t only frustrating, they’re costly as well. Seventeen percent of small business employers say one bad hire cost between $1000 and $2500. 1 in 5 (20 percent) say it cost between $2500 and $5000, and 11 percent say it cost between $5000 and $10,000.

But small businesses stand to lose much more than just money. When asked how a bad hire affected their business in the last year, small business employers cited less productivity (36 percent), compromised quality of work (30 percent), and lost time to recruit and train another worker (28 percent).

What Makes a Hire “Bad”

A “bad hire” can mean different things to different people. When asked what made them think they had made the wrong decision, small business employers who have made a bad hire said:

While the candidate didn’t have all the needed skills, thought they could learn quickly: 36 percent
Candidate lied about his/her qualifications: 31 percent
Took a chance on a nice person: 32 percent
Pressured to fill the role quickly: 27 percent
Had a hard time finding qualified candidates: 28 percent
Focused on skills and not attitude: 28 percent
Ignored some of the warning signs: 25 percent
Didn’t do a complete background check: 10 percent

Overall, small business employers (including those who haven’t made a bad hire) used these terms to define a bad hire:

The worker didn’t produce the proper quality of work: 57 percent
The worker had a negative attitude: 57 percent
The worker didn’t work well with other workers: 53 percent
The worker had immediate attendance problems: 47 percent
The worker’s skills did not match what they claimed to be able to do when hired: 49 percent

3 Ways to Prevent Bad Hires from Infiltrating Your Small Business

The best defense against a bad hire is a good defense. Take these steps to prevent costly hiring mistakes at your small business.

Build your talent pipeline: Pressure to fill the role quickly can lead to hasty - and poor - hiring decisions. If you focus on building your talent pipeline with quality candidates all year long (not just when you have a position to fill), you will already have a pool of candidates ready when it comes time to hire. Having a talent pipeline enables you to get to know candidates over time so you can make better hiring decisions when it matters.
Check references: Failure to check references is one of the biggest causes of hiring mistakes. Finding out a candidate lied on his or her resume is another one. According to recent CareerBuilder research, 1 in 2 small business employers have caught a lie on a resume. Don’t leave anything to chance. Ask candidates for a list of references and then follow through to validate their claims. One great question to ask references is, “Would you rehire this person if the opportunity arose?” If the answer is no, it might be time to move on.
Enlist the help of your employees: Employee referrals are one of the best sources of long-lasting, quality hires. Create an employee referral program that rewards employees for referring candidates to your open positions.