Recruiting and hiring good employees is arguably the most critical aspect of running a business. Finding the right candidates is crucial: After all, if you're not hiring the right people to begin with, your ability to succeed in nearly everything else you do will be greatly compromised. That's why it is important to consider the cost of a bad hire — which can be surprisingly high.
Why it's important to recruit the best
Your company loses more than time, money and effort by recruiting, hiring and training people who perhaps shouldn't have been brought on in the first place. The disruption of a new hire nightmare can be costly. If constructive coaching and HR intervention fails, you might suffer the loss of customers, office productivity and damage to staff morale. But the cost of a bad hire doesn’t end there.
Consider the expense and hassle you face when you have to cut your losses and dismiss this wrong hire. In the long run, it's more difficult for the manager and team to accommodate a poor performer than it is to invest in an effective candidate evaluation process.
The wisest hiring managers put in the time and effort on the front end to make sure they have the best available pool of applicants for every job opening. And they determine whether they have good procedures in place for evaluating candidates before they even get started.
The cost of a bad hire: higher than ever
The biggest mistake you can make when you're in the market for new employees is to rely on the same tried-and-true methods you've been using for years. Consider the following factors that compound the cost of a bad hire:
- A lot more is at stake today — Long gone are the days when you could minimize the consequences of a bad hiring decision by finding a place for a new employee who isn't fitting in. The pace and pressure in today's workplace are too great. Everybody has to contribute, which means more than simply doing one's own job. It means having a measurable impact on a company's ability to compete, maintaining high quality standards, and keeping customers happy and costs under control.
- The qualifications for jobs that were once considered routine are escalating — With fewer layers of management present in most small businesses, today's line employees must do their jobs with less supervision than in the past. Not every employee can flourish in this kind of environment.
- Technology is having a huge impact on work processes — Because just about every task in business has to be done faster than ever, companies of every size are relying on technological advances to streamline day-to-day operating procedures. Few small businesses can afford to have employees who resist their best efforts at change management and continue to have difficulty adjusting to a more rapid pace and increasing demands.
How to avoid making a hiring mistake
What’s the easiest way to avoid the cost of a bad hire? If you don't have the time and resources to devote to identifying and evaluating candidates, you can get help.
The next time you need candidates, work with a staffing and recruitment expert!