Cost of a bad hire and how to avoid bad hires

3 mins

Table of Contents

Employees are the frontrunners of each and every business. Good and efficient hiring is necessary to ultimately increase a company’s revenue generation. However, the cost of a bad hire is extremely expensive. Take a step back and consider the cost-effectiveness of your hiring practices as it can help save you time and money. Hiring the wrong candidate can lead to significant risk in a company’s progress. In order to prevent this, today’s employers are going all out in their hunt for talent, utilizing the best possible resources. Thus, this blog discusses the several ways in which one can avoid a bad hire.

Firstly, we will define what exactly a bad hire is. Qualities of candidates who are considered to be a bad hire include-

  • Fail to uphold the standards of performance and quality of work expected
  • Slack in commitment and consistency in the job role
  • Misfit in the workplace culture
  • Poor decision-making skills, bad judgment in the analysis of data
  • Having a negative attitude- which can be detrimental in a workplace

These qualities are usually overlooked for a short period of time. Hiring the correct person is extremely important, as they are what make up your organization. A bad hire can be detrimental/painful for your organization. Below are the points mentioned to avoid a bad hire.

Measure the quality of the hire

Quality of hire is measured by a candidate’s performance rating, which is an indicator of the performance of a candidate. Low first-year performance ratings are indicative of bad hires, which can cost a company thousands of dollars. Measuring the quality of hire is the input for the Success Ratio. It divides the number of hires who perform well by the total number of candidates hired. A low ratio means that you should re-evaluate your selection process.

The success ratio is also used as an input for recruitment utility analysis which enables you to calculate an ROI for different selection processes.

Time to fill 

This is an internal recruiting measure that is cited in ISO 30414 HR guidelines. It measures the process from a recruiting perspective, which is the number of days between the approval of a job request and the date of acceptance of the job offer from the candidate.

Time to Fill = net business days (offer acceptance – requisition date)

Write better job Descriptions

Your job description could attract the wrong candidates, hence it is necessary that the team writes a good job description. Avoid the desire to add too many desired skills/experiences in the job description, and don’t be too vague or ambiguous about the details either. Make sure the job description has the correct skills and personality mentioned that is needed for the job.

Conduct better interviews

Interviewing is a skill that is very important in the recruitment process. The hiring team must be aware of the right questions to ask. They should also use an interview rating scale to measure the scores. Moreover, hiring managers should know that their intuition and input are very important, and if in doubt it is best not to hire. Use Interview Intelligence to conduct better interviews.

Read more to understand how to schedule job interviews efficiently for a good hire.

Background checks

A background check is the analysis of a candidate’s history to hire them. It is the last step of any candidate selection process as it is regarded as a fruitful practice to ensure a safe and productive workplace environment. It has several advantages such as:

  • Increase in employment retention
  • Improves workplace productivity
  • Improves the quality of the employees
  • Saves energy, time, and resources to avoid bad hires

According to FactToHR, the number one agenda of background checks is to hire the right talent for the job which involves a careful analysis of the candidate based on qualifications and sense of character. However, over 51% of companies overlook the latter half. Moreover, 6% of a company’s revenue is lost in the name of employee fraud due to the result of a flawed hiring process. Therefore, background checks cannot be overlooked at any cost.

Utilize automation tools

Due to the advancement of technology in the last couple of decades, it is possible to completely automate the process of hiring. There are recruitment tools online that offer the automation of workflow which help in efficiently handling administrative tasks. This gives the recruiters the liberty to focus on the interviewing of candidates. The use of this automation could help your HR team save time and resources.

BarRaiser Interview Intelligence is committed to ensuring a smooth interview and recruitment process in order to facilitate a fruitful and not-bad hire. A bad hire can be expensive to the company’s overall revenue and reputation, thus it is necessary to avoid it at all costs.

Experience smarter interviewing with us

Get the top 1% talent with BarRaiser’s Smart AI Platform

CTA blogs page
Experience smarter interviewing with us
Blog page sidebar--BarRaiser

Found the article useful & want to share it with your team?