Unfortunately, despite the many measures and policies organisations take to ensure they hire the best people for their roles, occasionally a new starter can become an unexpected problem. Despite having the right credentials and seeming to fly through the interview process the ‘ideal’ candidate can for whatever reason, turn out not to be suitable for the position they’ve just filled. A Bad hire is more common than you might think. According to a Harvard Business Review article, only 19% of new hires are considered fully successful and by the 18-month point, 46% are actually deemed failures- for either resigning of their own accord or having their employment terminated.
While a new starter themselves may only be at the organisation for a few weeks or months, the impact their time at the organisation will have, unfortunately, has both long-term and far-reaching effects on the company- from the obvious financial costs to productivity levels and even staff morale. Before deciding on or commencing your recruitment journey, it’s worth considering the long-term consequences of hiring an unsuitable candidate and more importantly, know the steps you can take to minimise the risk of this occurring and how to move forward if a new starter doesn’t work out. Read on to find out more:
What Is A Bad Hire
Broadly, a bad-hire is someone who does not work out in the role they were initially recruited for and ultimately leaves the organisation – either of their own accord or through the termination of their contract – within the first 18 months. Why would an employee not work out in a role? According to the employment website CareerBuilder, the two key reasons a new starter is deemed unsuitable for a role is because they don’t aligning with the company’s cultural values or because their skill and knowledge level do not match the requirements of the desired role. Perhaps their attitude didn’t align with or demonstrate the key company values of an organisation or maybe they felt bored or dissatisfied in their role because their abilities exceeded the role’s requirements.
Ultimately, no matter the reason a new starter isn’t the right fit for an organisation, the repercussions their entry and subsequent departure will have on the organisation can be considerable. Some of which are outlined below:
The Impacts Of A Bad Hire
Decreased Productivity- If a candidate is not how they’ve presented themselves in their resume and interviews - especially in regards to their technical knowledge and ability- there’s a chance that they won’t be able to effectively perform the tasks they’re required to do. This will have an obvious impact on productivity; tasks can take twice as long because the new starter isn’t confident or efficient in performing them. The quality or output of their work could be lower because of their limited ability. Furthermore, their unsatisfactory performance can create additional stress and work for their colleagues, who will have to pick up the slack or re-do their work in order to meet particular deadlines and targets. Not only does this then negatively impact the productivity levels of fellow team members but can cause added frustration from colleagues and negatively impact overall morale within the office.
Cultural Imbalance- In addition to ensuring your new hires have the right experience to perform a role, assessing how they will fit in with your company’s culture is equally as important. Unfortunately, this is more difficult to determine prior to a new starter joining a team and can be subjective as each organisation’s culture is unique. However, from a recruitment perspective generally, a ‘good cultural fit’ equates to someone who will be a team player, someone who will be able to work effectively with their team and contributes to a positive and collaborative work environment. Obviously, someone that isn’t able to provide this is going to have a significant impact on overall employee morale and how efficiently teams and departments work together. Miscommunication, disagreements or more serious confrontations, can all occur when someone isn’t a good cultural fit for an organisation, which are not conducive to a positive and high-performing workplace.
Reputation- Bad hires - especially those that are client-facing- can damage relationships, through disrespectful behaviour, not having the necessary relationship management skills or being able to display the company’s core values through their actions. Relationships aren’t easy to rebuild once trust has been broken, and consequently the impact of a bad hire in a client-facing role will negatively impact the chance of repeat business, which results in a significant opportunity cost for the business.
From an internal perspective, mismanaging a new hire can also have negative repercussions for how your key stakeholders perceive your organisation. If an organisation hires an unsuitable candidate, colleagues can question top-level management’s ability to make smart decisions. Once an employee’s faith and trust in their organisation starts to fade, they begin to disengage and are at a higher risk of leaving.
Financial Impact – Lastly, there’s the more obvious impact of a bad hire…the financial loss. The U.S Department of Labour estimates the cost of a bad hire at 30% of their annual salary. This factors in the money that’s spent on training, the cost of lost productivity and the costs involved in advertising and recruiting for the role in the first place. Money wasted when the new starter doesn’t work out and leaves the business. Furthermore, when this happens, the organisation has to spend additional money to re-advertise the role again and re-start the recruitment process.
How To Minimise A Bad Hire
To minimise the risk of wasted funds, time and resources there are a few steps organisations can take:
Firstly, organisations need to take a closer look at their recruiting practices. Conducting a detailed audit of your job advertisements, hiring, interviewing and assessment practices should highlight any areas for improvement. For example, are you providing a realistic description of your roles in your job advertisements? Do you need to incorporate assessments int your selection processes? Do you under-evaluate personality traits?
While conducting your audit, you should be able to determine whether or not your hiring managers are performing candidate assessments in the same way. Trying to ensure there is some unity and consistency in your recruitment policies overall, will help to ensure the level of interest you receive across the board is consistent and to the required calibre. Uniformity can also help to reduce bias, as some managers may subconsciously modify their processes to select candidates who look and sound like them.
Secondly, organisations should start conducting exit interviews with all employees leaving the organisation. Exit interviews can help hiring managers gain some insightful feedback from the employee around the recruitment process. Feedback they might not have gained otherwise, as employees tend to be more candid on leaving an organisation. Relevant information could include whether or not the job advertised was a realistic portrayal of the role the new starter was asked to do, whether or not the new starter felt supported in their onboarding process etc. The revelations from these exit interviews can then be used to improve current hiring practices and avoid those same issues occurring in the future.
If you are looking for advice or more information on how to improve your recruitment processes, you can reach out to our consultants at Design & Build. Over the last seventeen years, Design & Build have specialised in working with our clients to attract, recruit, and transition the right candidates to the right roles. During this time, we have built an extensive and trusted network and developed thorough processes, so that we are attracting a selection of candidates that will best meet the particular client’s needs. Reach out to our team of consultants today to help ensure you are engaging with relevant candidates that can grow into valued employees and break out of the vicious and expensive cycle that starts with a bad hire.
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 Kislik, Liz. (2018). What To Do When You Realise You Made A Bad Hire. Harvard Business Review. Retrieved from: https://hbr.org/2018/08/what-to-do-when-you-realize-you-made-a-bad-hire
 DeLoatch, Pamela. (2018). You’ve Made A Bad Hire- What Happens Now? HR Drive. Retrieved from: https://www.hrdive.com/news/youve-made-a-bad-hire-what-happens-now/529253/
 Haid, Michael. (2020). Collateral Damage: Why The Cost Of A Bad Hire Is Much More Expensive Than You Think. LLH. Retrieved from https://www.lhh.com/hk/en/organisations/our-insights/collateral-damage-why-the-cost-of-a-bad-hire-is-much-more-expensive-than-you-think