What’s the Cost of a Bad Hire?

What’s the Cost of a Bad Hire? | Pirate Staffing

Hiring is an expensive and time-consuming process. If the person you choose isn’t the right fit, you’ll have to eat those costs, and then start over again from scratch. But a bad hire is even worse. Someone who is entirely unqualified could cost your company a fortune in expenses you may not have even considered. Here are some potential costs, along with a few tips for avoiding a bad hire in the first place.

What is The Cost of a Bad Hire?

Common Costs

Every situation is different, but when you make a bad hire, you are at real risk of incurring some or all of these costs:

  • Lowered productivity. Your entire team’s productivity could suffer under a bad hire, potentially making things worse than if the position simply remained open.
  • Loss of clients. It’s hard to gain trust with clients and easy to break it. If your new hire does a poor job, some clients may simply take their business elsewhere.
  • Reputational damage. Your company’s reputation could take a major hit if either disgruntled ex-clients or a disgruntled bad hire decide to write poor reviews.
  • Wasted time. Managers rarely take the extreme step of firing someone. Instead, they tend to put a great deal of time and effort into coaching and retraining. That’s time that could have been spent on other business matters.

Making Better Hiring Decisions

The goal is, of course, to avoid a bad hire altogether. While nothing is guaranteed, there are proactive steps you can take to increase your chances of stronger hires.

  • Try behavior-based interviews. Open-ended questions that focus on behaviors can tell you a lot about a candidate. Try openers such as “What would you do if…” or “Tell me about a time when…” Tailor your questions to common situations in your workplace.
  • Involve your staff. Start the candidate evaluation process when the person first walks in the door. How do they treat the janitor, the garage attendant, and the receptionist? The way they treat people who have nothing to offer can tell you a lot about who they really are.
  • Check your assumptions. Unconscious bias is all too real in the hiring process, and it can lead you to inadvertently overlook some highly skilled candidates. Choose a neutral language for your job descriptions and use blind hiring software to strip out resume details such as name, college, or hometown.

Need New Talent?

If you’re ready to bring on new temp-to-hire, temporary, or permanent employees, Pirate Staffing is here for you. Learn what we can do to help, and then contact us to get started.