What’s the True Cost of a Bad Hire? What are bad hires costing your company? How do you ensure that the individual you’ve hired is a good fit for your company? One good way is contract and contract-for-hire workers. These individuals are vetted by the employment agency and can be hired on as temporary workers to ensure a good fit within your company’s dynamics. What do bad hires cost your company? Read on to find out more. They may not have experienced the type of PR nightmares that Netflix experienced from its ill- conceived decision to launch Qwikster or Yahoo! Inc. saw after firing CEO Carol Bartz over the phone, but two-thirds of American companies say they’ve made business mistakes this year they wish they could take back. Those mistakes, according to a new survey, came in the form of bad hires, the results of which ended up costing them in more than just bruised egos. According to a new CareerBuilder survey on the cost of a bad hire, 69 percent of employers reported that bad hires lowered their company’s productivity, affected worker morale and even resulted in legal issues. Forty-one percent of companies estimate that a bad hire costs more than $25,000, and one in four said it costs more than $50,000. While some mistakes are beyond the hiring manager’s control, there are ways to avoid hiring the wrong person. “The more thoroughly the candidates are vetted, the less likely they will be a poor match,” says Rosemary Haefner, vice president of human resources at CareerBuilder. Haefner advises employers to allow job candidates the opportunity to meet as many employees in the department as possible – especially if they will work closely together. Also, candidates should provide ample evidence to show they have the skills and work experience required for the position.
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What’s the True Cost of a Bad Hire?
What are bad hires costing your company? How do you ensure that the individual you’ve hired is a good fit for your company? One good way is contract and contract-for-hire workers. These individuals are vetted by the employment agency and can be hired on as temporary workers to ensure a good fit within your company’s dynamics. What do bad hires cost your company? Read on to find out more.
They may not have experienced the type of PR
nightmares that Netflix experienced from its ill-
conceived decision to launch Qwikster or Yahoo!
Inc. saw after firing CEO Carol Bartz over the phone,
but two-thirds of American companies say they’ve
made business mistakes this year they wish they
could take back. Those mistakes, according to a new
survey, came in the form of bad hires, the results
of which ended up costing them in more than just
bruised egos.
According to a new CareerBuilder survey on the
cost of a bad hire, 69 percent of employers reported
that bad hires lowered their company’s productivity,
affected worker morale and even resulted in legal
issues.
Forty-one percent of companies estimate that a bad
hire costs more than $25,000, and one in four said it
costs more than $50,000.
While some mistakes are beyond the hiring manager’s
control, there are ways to avoid hiring the wrong
person. “The more thoroughly the candidates are
vetted, the less likely they will be a poor match,” says
Rosemary Haefner, vice president of human resources
at CareerBuilder.
Haefner advises employers to allow job candidates
the opportunity to meet as many employees in the
department as possible – especially if they will work
closely together. Also, candidates should provide
ample evidence to show they have the skills and work
experience required for the position.
Hiring misTakes Happen…BuT WHy?
When asked to give a reason for the bad hires, an
estimated 34 percent of employers attributed the
mistake to the fact that sometimes things just don’t
work out. A rushed decision, however, topped the list
of reasons companies gave for making a bad hire.
38 percent of employers said they needed to fill
the job position quickly.
21 percent say insufficient talent intelligence
contributed to bad hiring decisions.
11 percent didn’t perform reference checks (a
commonly undervalued part of the hiring process,
according to Gilt Groupe CEO Kevin Ryan.)
The price of a bad hire: It’s more than just money
The price of a bad hire adds up in variety of direct
and indirect ways. For example, 9 percent of
companies said bad hires result in legal issues and
11 percent said they result in fewer sales. The most
common effects of a bad hire are:
Lost worker productivity: 41 percent
Lost time to recruit and train another worker: 40
percent
Costs associated with recruiting and training
another worker: 37 percent
Negative impact on employee morale: 36 percent
Negative impact on client solutions: 22 percent
How bad is bad? Characteristics of a bad hire
When it comes to what makes someone a bad
hire, employers reported several behavioral and
productivity related problems:
Failure to produce the proper quality of work: 63
percent
Failure to work well with other employees: 63
percent
Negative attitudes: 62 percent
Immediate attendance problems: 56 percent
Subject of customer complaints: 49 percent
Failure to meet deadlines: 48 percent
Can Bad Hires Turn inTo good employees?
For more tips on how to avoiding hiring mistakes,
check out the recent interview with Hire with Purpose
author Jay Goltz. Wondering whether to fire or try
to fix an employee? Get insight from this recent
interview with management expert Anne Loehr,
author of Managing the Unmanageable: How to
Motivate Even the Most Unruly Employee.
This can be found at http://thehiringsite.careerbuilder.com/2011/12/16/true-cost-of-a-bad-hire/