Imagine you had to take a pay cut every time a bad hire cost the company in some way.
You could go home without a paycheck.
How? Because I’ve identified 5 hidden costs that bad hires make you pay:
1. Money Cost
OK, this one is not that hidden.
Money is an obvious cost of every hire:
- Posting job ads – $
- Background checks – $$
- Employee referral fee – $$
- Recruitment agencies – $$$
When you make a bad hire, all this money will feel wasted.
2. Time Cost
Hiring can take as long as 6 months from when you start. Then there’s the time until you discover the hire isn’t working out.
That’s a lot of time in limbo. Let’s not forget that people in the business world often say, “Time is Money!”.
3. Productivity Cost
Think of what would happen if you hire someone with a promising resume, give them big responsibilities and they fail to produce.
A bad hire’s low productivity risks the quality of certain work. Not only that, it can hurt overall productivity levels.
Your job gets harder to make sure this doesn’t happen.
4. Emotional Cost
Bad hires can be incompetent, messing up even the smallest of tasks. Or they simply refuse to do what needs to be done.
Both issues can wreak havoc on your day-to-day emotions.
5. Reputation Cost
Firing a bad hire early on sounds like the right call. But it could still cost your or your company’s reputation.
There are 3 ways this could pan out:
- Your employer’s brand could get tarnished on employer review sites like Glassdoor. “Toxic management. 1 star”.
- Their negative actions on the team could have a lasting impact on how your employees see you.
- Other managers – including your boss – could see your making a bad hires as a sign of weakness.
Want to avoid these costs?
It’s key that you understand that bad hires happen because hiring is a game on chance. But you can take action to stack the odds in your favour.
Start off by thinking about how you can better focus your hiring.
Then look into how you can ask better interview questions.
Take it a step further by looking into how hiring committees can give you a more rounded perspective on potential hires.