We’ve all been there. We onboard a new employee, only to realize a few months in that it’s not the right fit. While not always an obvious expense, hiring the wrong person for the job is one of the most expensive mistakes an organization can make.

Bad hiring does not only hurt a company financially, but motivation, productivity, and reputation will also take a hit. It’s inevitable that the wrong candidate will get the job every once in a while, but are there ways to ensure this is a rare occurrence? The best way to mitigate the risk of making a bad hire is to invest in recruiting and perfect your hiring process.

What are the biggest costs of a bad hire?

Financial Loss

The U.S. Department of Labor reports the cost of a bad hire can reach up to 30% of the employee’s first-year earnings. Take an employee with a salary of $60,000 -- that’s a $20,000 expense. The loss will vary in size depending on the employee’s seniority and the length of their tenure. The higher the seniority, and thus salary, the higher the cost of the bad hire. Positions that need ample training will also result in a higher cost as all that training is wasted if your bad hire is terminated. There are also potential legal fees to take into account should a disgruntled employee file a wrongful termination suit. Most importantly, a bad hire blocks new income as you’re also missing out on the potential ROI you’d be getting with the right hire. Many people argue that the actual cost of a bad hire is much greater than 30% as other expenses and losses aren’t as easy to quantify.

Motivation & Productivity Loss

Beyond the financial impact, motivation loss is also a big issue. A weak employee doesn’t work in a vacuum. Every day they’re working with superiors, peers, and customers. They could even be managing a team. A bad hire will have a negative impact on the entire team’s morale. If the bad hire is in a leadership position, their direct reports will suffer. Great workers will begin to disengage and even choose to leave an organization if their relationship with their manager is poor, costing the company even more than initially expected.

With a lack of motivation and team morale, productivity will also take a hit. A bad hire is like a broken wheel that will slow down the entire team. Coworkers may be hesitant to work with a bad hire and try to take on too much work on their own. When a bad hire doesn’t pull their own weight, good employees get burned out trying to make up the work. A lazy or consistently disorganized employee will lead to sloppy work, missed deadlines, and sub-par project execution. While one bad apple may not seem like a big deal, their failings have ripple effects that delay the entire firm’s ability to reach its goals.

Reputation Hit

Perhaps the most dangerous consequence of a bad hire is the negative impact they can make on an organization’s reputation. A company’s value and future business depend greatly on a solid positive reputation. Employees’ behavior and performance impact the way customers and other outsiders perceive their products, services, and workplace culture. A customer’s bad interaction with an employee can lead to a bad review online. Enough bad reviews and customers will seek out your competitors. A disgruntled employee (either your “bad hire” or someone who has to work with your bad hire) may leave a harsh review on your organization’s Glassdoor page or another workplace rating site. This dissuades future candidates from applying to your company. So a bad hire not only hurts your ability to retain customers, but also your ability to retain top talent and attract new talent.

How can you stop these losses before they even start? Invest in recruiting.

Widen your Talent Pool

The best way to avoid dealing with a bad hire is to hire the right person in the first place! So how do you do this? No one sets out to hire the wrong person - it’s expensive and repairing the situation is also a headache. In order to avoid this HR nightmare and the damage a bad hire can make, invest in recruiting. Not only does an investment in recruiting have a significant payoff long-term, but it also avoids morale and productivity issues in the short-term.

One option is to build out your recruiting team and increase time spent sourcing and evaluating candidates. But this is expensive and time-consuming. A better option is to leverage technology. Fetcher is a full-service recruiting automation service that will reduce your chances of making a bad hire. Widening your talent pool increases your chances of finding top talent. Fetcher allows you to source candidates while you sleep. Just input what you’re looking for and Fetcher handles the rest. And Fetcher won’t waste your time with any old candidates. Our human-in-the-loop feature means a real person is moderating the candidates that come through our filters, ensuring only diverse, qualified candidates land in your inbox. With Fetcher, you can email over 10X the candidates you can manually. Fetcher’s data analytics dashboard even allows you to track how your hiring campaigns are performing. Best of all, Fetcher is significantly less expensive than a bad hire, and a great solution to make your current recruiting team more efficient, whether you’re looking to increase headcount or not.

Standardize your Hiring Process

Once you’re ready to interview, don’t get caught up on where the candidate went to school or their number of degrees. Focus instead on what the candidate will add to your organization. Here are some important points to consider in order to protect your company from a bad hire…

• Don’t get caught up on where the candidate went to school or their number of degrees. Focus instead on what the candidate will add to your organization. Are they innovative and adaptable? Do they have good communication skills? And most importantly, do they work well with others? Some of our customers' most successful, motivated employees did not go the standard collegiate route, but earned certificates or were self-taught. They not only bring a new perspective to the organization, but they also are loyal and dedicated to the company that gave them a chance.
• Formulate a systematic hiring strategy that’s consistent for all candidates. Don’t make any exceptions, even if you’re short on time. If you rush to make a hire and skip steps of your process, you’re likely to overlook areas where your candidate is lacking. Companies that lack a standardized interview process are 5 times more likely to make a bad hiring decision.
• Make sure responsibilities and expectations are clear from the get-go. Not only is this good practice and can help new employees flourish but, it will also make termination easier if an employee is not meeting expectations.
• If you can, try before you buy. A trial period or test project will let you see a candidate’s work style and the way they communicate with others. This can help you weed out someone who’s falling short before you regret hiring them.

Don’t risk the damage a bad hire can cause to your company’s finances, productivity, and reputation. Instead, invest in recruiting and hire people that will help your company reach their goals. To find the best talent, leverage technology to increase your sourcing capacity and target better candidates. Once you’re happy with your top of funnel, make sure all candidates receive identical interviews and review processes. Standardizing your hiring process will ensure potential bad hires don’t slip through the cracks. You don’t have to take this challenge on alone. Fetcher is here to help!