Understanding the Cost of a Bad Hire (and How to Avoid One!)

While finding the right candidate for your organization is an ideal business decision, increasing productivity and capabilities, hiring a bad fit can waste time, money, and resources for the company. A bad hire can be costly in many aspects including costs of training, severance pay, and productivity loss. However, there are many ways to avoid this by choosing the right candidate from the get-go. Doing so requires a thoughtful interview and hiring process, which includes more than just a technical evaluation but also a cultural and organizational assessment.  In this post, we break down the cost of a bad hire and how finding the right hire can bring long-term success and growth to your company. 

The Cost of a Bad Hire 

According to a survey, 75% of employers said they have hired the wrong person for a position. Oftentimes, mistakes made throughout the hiring process result in organizations choosing the wrong candidates, and while this is avoidable by tweaking your hiring processes, mistakes can be costly. In fact, the average cost of hiring the wrong employee is $17,000. Overall, choosing the right hire is key to being cost- and time-effective, which can be done through facilitating a thoughtful hiring process.  

How to Choose the Right Hire 

There are many boxes to check before sending an offer letter to a candidate, and a poor assessment of a candidate can turn out disastrous in the long run. To avoid this, consider implementing these methods prior to committing to a candidate: 

Assess Technical Skills 

Your interview process needs to be catered to the job’s responsibilities. For example, if you are hiring for an SAP implementation role, passing a technical assessment would be a fitting requirement to see your candidates’ skills in-action. Making sure your candidate possesses the right technical or soft skills is a key component in knowing if the candidate will succeed in their role.  

Check References 

Knowing the relevant background of the candidate you are planning to hire is always a promising indicator of success. Getting a snapshot of a candidate’s past performance will provide insight into their potential at your organization. Interviewers can ask past employers specific questions about the candidates’ strengths and weaknesses, work ethic, and team dynamics to get answers to questions that interviewees may not have communicated.    

Evaluate Cultural Fit 

Of course, having the right technical skills is an important aspect when looking for the right hire; however, fitting in culturally and socially is equally important. Being a cultural fit contributes to overall job satisfaction and creates an environment that nurtures productivity and engagement. As such, a candidate’s values should align with the mission of the organization to ensure that they will fit well within the teams.  

Looking Ahead 

When assessing candidates for an open role, making sure you have a full picture of the person you are planning to hire is key. Easily stated, hiring the wrong fit is a common but very avoidable mistake that many organizations make. To mitigate this costly and timely mistake, implementing thoughtful and relevant interview procedures can make your hiring process smooth and efficient.  

Contact BCTG’s staffing and recruiting experts today for guidance on your recruitment and hiring processes.  

Contributions from Leah Harding