The official blog of Abacus Group — a place to share our knowledge and thoughts on trends in recruiting

September 05, 2013

The Burdens of Poor Hiring and Strategies for Prevention

The right people are the foundation of a successful business. A distinct blend of personalities, skills and perspectives synchronize to drive productivity and innovation. Of course, the wrong people are sometimes brought into an organization, disrupting its core. Earlier this year, leading job search website CareerBuilder found that characterized by low-quality performance, inability to work well with colleagues, bad attitude and absenteeism, pose financial and other, less tangible costs to employers.  While approximations vary among expert sources, the National Business Research Institute posits that the monetary losses associated with a bad hire combine the position’s base salary, HR professionals’ wages, training costs and employment ads, which can total anywhere from $25,000 for low-level, customer service roles to $300,000 to higher-paying executive positions.  The Society for Human Resources Management (SHRM) estimates a less conservative figure: up to five times the bad hire’s annual salary. That means the wrong hire for a middle-management accounting position with $80,000 yearly compensation equates to $400,000 lost.

In addition to losing tens – or possibly hundreds – of thousands of dollars, employers are vulnerable to several fewer measurable damages as a result of haphazard hiring processes. CareerBuilder’s study identified noticeable setbacks in company productivity, employee motivation and client relations following a poor hire’s inauguration. Such difficulties are typically endured in addition to tremendous amounts of lost time, including that required to recruit, interview and train replacement employees. SHRM notes further unintended consequences related to employee morale, specifically reductions in trust and respect for the leaders responsible for the poor hire.

Hiring the wrong person evidently has serious repercussions. Employees responsible for the recruitment and selection of new staff, therefore, need to remain mindful of several recommended strategies for better hiring. To be effective, the hiring process must be sharply targeted, thoroughly evaluative and highly resourceful. Employers can substantially reduce the likelihood of selecting unsuitable candidates by exercising the following strategies:

Precise, Appealing Job Descriptions Great hires start with their advertisements. Job descriptions serve as first impressions to prospective candidates, so they need to contain carefully selected, yet interesting material to appeal to the appropriate audience. This is best achieved through consistent coordination among Human Resources, the hiring manager and/or marketing employees. When the requirements or attributes for the position are unclear, the hiring process will be equally aimless and, most likely, unsuccessful. 

Critical Assessment Measures Effective interviewing practices provide a crucial safeguard against poor hires.  Interviews are most valuable when approached with preparation to discuss only the most relevant topics about skills, experiences and past accomplishments, rather than generic questions.  In addition, productive interviews allot time for candidates to ask questions so that they, too, can evaluate the opportunity and their fit with the organization. Interviews also need to account for candidates’ cultural compatibility, or their perceived ability to mesh and work effectively with the organization at large.

Executive Search Professionals A partnership with an executive search firm simplifies the employer’s hiring burden. Working on a contingency basis, a recruiter is only compensated for a successful placement, providing an incentive to present exceptional individuals who are a strong match for the position.  Further, the recruiter’s wide base of contacts and advanced digital search tools allow for faster identification of the right candidate. Though executive recruitment firms charge fees as a percentage of the role’s base salary, these costs are trivial compared to those incurred following a bad hire.

Probationary Employment Periods A fourth and final recommendation to steer clear of poor hiring is to implement probationary employment periods for certain staff. Otherwise known as temporary-to-hire roles, this “try before you buy” model ensures the employer’s long-term investment in only the right people. Temp-to-perm hiring can be executed in combination with any or all of the aforementioned strategies, while arming the employer with an extra layer of security.

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