Cost of a Bad Hire – Tips to Avoid
The Business Journal cited a Society of Human Resources Management (SHRM) study that found a cost of a bad hire can cost up to five times the bad hire’s annual salary. Costs can include:
- Recruitment and hiring costs
- Human Resources time
- Hiring Management/Team time
- Orientation and training costs
- Learning curve productivity loss
- Work group/team productivity loss
- First, know your job requirements and ensure your selection team is on the same page. Also, have a good understanding of the qualities besides knowledge-skills-abilities (KSAs) that are needed to perform well in your organization.
- Utilize good selection practices throughout your hiring process to avoid legal pitfalls. Examples, identify relevant selection criteria for screening, develop behaviorally-based interview questions and treat all applicants consistently.
- Make sure everyone on the selection team understands what to look for on an applicant’s resume and identify any areas that need more explanation for the interview.
- Plan and conduct your employment interview carefully. Ask about qualifications, experience and the applicant’s expectations – dig for quantitative results. Describe the job requirements, company culture and compensation and benefits. Also, listen and evaluate the applicant’s “ability-to-learn”. Consider including members or leaders from the team the applicant would work with in the hiring process.
- Consider using validated assessment tools, if applicable. These tools can provide you with additional confidence that you are hiring a qualified, capable worker.
- Finally, do your homework. Check references, driving record (if applicable) as well as background checks. Be thorough.