How to avoid a bad hire?
Hiring the wrong person can have significant consequences for your business. This is especially true if you’re a small company, where a single person makes up a lot of your workforce.
What you might not realize is how expensive it is – in dollar terms – to have a bad hire. The head of Zappos once estimated that poor hires had cost the company over $100 million.
The biggest problems with hiring don’t come from the candidates themselves, but rather from the hiring process. The good news is that you’re in control of how you hire, so you’re able to make changes to the process to avoid a bad apple.
True Cost of a Bad Hire
If you hire someone who’s a bad fit, the cost can be astronomical. If they stay for a while before being let go, they can impact morale, the performance of the departments, and may even affect the results of the entire company.
An agency in London estimated the total cost of a bad hire to be as high as $240,000, when you take into account all of the expenses related to hiring, poor performance, firing, and rehiring.
Here are some of the costs you may face:
- Recruitment fees and HR staff time
- Relocation and training for the poor hire and the person who replaces them
- Negative impact on team performance
- Lost customers
- Outplacement services and other termination costs
- A weaker brand
- Lower confidence within the HR team regarding finding good employees
- Legal fees
Other estimates place the cost of a poor hire at around 30% of the employee’s annual salary. Again, it depends on how long the employee is in place, disrupting your process, and how large your team is.
Avoiding a Poor Hire with a Pre-Interview Questionnaire
What steps can you take to avoid a poor fit from a new employee? One of the first elements is screening all candidates before they reach the interview process.
Many times, when you hire a bad apple, you do so because the team didn’t have time to vet everyone thoroughly. By using a pre-interview questionnaire, you can save your team time and money while getting more information about an applicant before you have invested any time interviewing.
When you use a service like Hiringcue.com, you can choose from hundreds of premade questionnaires or create your own. Be sure to ask questions about the applicant’s skills, experience, and teamwork abilities.
Using these screening questions will help you avoid spending interview time and HR resources on a candidate that isn’t qualified or will prove to be a bad fit.
Always Check References
When time is running short, and HR feels they have a good candidate available, checking references can get pushed aside. After all, it takes hours of phone tag to reach someone, and then you might still not have time to ask them all the questions you have.
Unfortunately, skipping references is one of the most significant factors in a poor hire. You need to know that someone is who they claim to be and that you aren’t judging on surface appearance alone.
Fortunately, you can use automated reference checksto save significant time and avoid phone tag. In 60 seconds, you can send a questionnaire to each reference and they can fill out their answers. As you get replies, they are put into a single database, so you end up with a holistic view of a candidate.
Some of the things you should be sure to ask about include:
- The candidate’s skillset and whether they have actually used the skills you need
- Questions about teamwork and how they communicate and get along with others
- Why they left their last position (a reference may give a more honest answer!)
- The applicant’s goals and what they look for in a job
Of course, you should always leave a spot for anything else they want to share. There may be valuable information that your questions don’t address.
Avoid Bad Hires & Save Time Today
If you prescreen applicants and use automated reference checks, you can learn a lot more about your candidates without wasting time and money from HR. These processes can help you avoid a bad hire and the enormous costs associated with it.
Hiringcue.com is an automated solution to streamline the reference checking & pre-interview process. Our solution aims to bring about an automated experience to the tedious, time-consuming task of checking references & pre-screening applicants.
Are you ready to improve your hiring? Contact us today to see how we can help.
Gary Kirksey – CEO
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