27 Mar What if it’s You? Solutions to Avoid Bad Hires.
Hiring is a topic of conversation on every leader’s mind these days. We are constantly bombarded with stories of labor shortages, absentee employees, quiet quitting, actual quitting, etc. So, what do you do to avoid the pitfalls of poor hires in a tight market? Maybe the first thing to do is look in the mirror. Grinding through a revolving door of employees is costly in both time and money and making the right hire the first time is critical in this market. If you don’t have processes in place to find employees that are the right fit for your company, you are setting yourself up for failure. So, what can you do? Let’s get into it.
The Cost of a Bad Hire
While hiring is one of the most important decisions you can make for the success of your business, we are hearing many stories of bad hires. Let’s look at the potential impact of these decisions on your bottom line.
A 2017 CareerBuilder Survey reported that 74% of employers say they have hired the wrong person for a position. What does it mean to your business when this happens? The U.S. Department of Labor estimates that the average cost of a bad hiring decision is at least 30% of the individual’s first-year salary. So an employee with an annual income of $50,000 – who does not work out – will potentially cost you as much as $15,000 above and beyond what you have paid them for however long they worked. When you factor in the following, the number could be even higher:
- The amount of time spent on the hiring process by multiple employees.
- Cost in time and money to onboard and train new employees.
- Cost of poor employee performance once hired.
- Impact of diminished morale of your team.
How Do Bad Hires Happen to Good Companies?
If we know that a bad hire costs us time, money, and frustration, how does it happen? No one thinks they are making a bad decision in the moment. But there may be some rationalization or urgency in getting an opening filled quickly. That same CareerBuilder survey explains how some bad hires might be made.
- 35% of employers knew the candidate didn’t have all the needed skills but felt they could learn quickly.
- 32% took a chance on a nice person.
- 30% felt pressured to fill the role quickly.
- 29% percent focused on skills and not attitude.
Three Critical Steps to Include in Your Hiring Process
- Behavior-Based Interviewing – Ask candidates to discuss their motivation and competencies for the role. Ask for specific examples where they have solved problems or demonstrated their skills in action. Consider implementing the following approach:
- Use standard questions that interviewers are asking every candidate.
- Have the same interviewers interview all candidates for a role for consistency.
- Provide specific guidance to the interview team – don’t leave it up to them otherwise, they might default to ‘So tell me about yourself.” The more standard and consistent you are with each candidate, the better you can determine best fit.
- Consider a rating system for questions – each interviewer has three to five questions they are asking and provides a rating (1-5). Then you have a scorecard which is helpful if a tiebreaker is needed, or colleagues are on the fence about a candidate.
- Skills Assessments – Depending on the role, formal skills assessments can help determine competencies in specific skills. TestGorilla is a great resource for all kinds of assessments.
- Reference Checks –consider using a 3rd party tool to get more candid and balanced feedback. I am not a big fan of directly talking to references provided by a candidate. Companies like SkillSurvey have a user-friendly online approach that ensures anonymity and provides data-driven reports to empower hiring managers to make better hiring decisions.
From Good to Great – Supplement Your Best Practices for Hiring
The number one action your company can take to ensure you are getting the best hire for your company is to have a well-defined, rigorous process in place. And follow it. Hiring on the fly, relying on a friend of a friend, going on instinct – these methods are akin to picking someone up in a bar. Referrals are often great and gut instinct can be your friend, but you still need to put every candidate through your process to ensure you are getting the best hire possible. Consider adding the following steps to raise your game even further:
- Whenever possible, try and interview candidates over a meal or coffee outside of an office environment.
- Give candidates some type of case study. This can be provided in advance or on the spot. Ask the candidate to respond. If written, you get to see that side of their communication abilities – if in person, then you see how they respond in the moment.
- Depending on role, ask shortlist candidates to present to a group (e.g. sales, finance, etc.)
While there are no guarantees in hiring, one thing you can count on is making a bad hire when you don’t take the time to create and follow a good process. If you would like to reevaluate your hiring process to ensure better-fit employees, reach out today. Agilitas can help. Let’s talk! You can reach me at firstname.lastname@example.org.