what are bad hires costing your business?


What are bad hires costing your business?

If you have been in a leadership role for any period of time, you have probably seen, or made, a bad hire. There are simply too many variables in even the best hiring process for any organisation to have a 100% perfect hiring record (please DM me if you have evidence to the contrary!).

The indicators of bad hires tend to be under-performance and/or conflict in the workplace and the costs associated with reduced output, as well as the management time and effort required to hire/remove/replace are well documented.

In this article we explore the real cost of bad hires in your business and what you can do to reduce the risk.

Their impact is far reaching

That a bad hire costs us money is clear, however the secondary effects travel far beyond the initial impact. There is an excellent article by LHH which refers to the ‘collateral costs’ of bad hires – those unseen ripples which undermine corporate culture and pull at the fabric of an organisation.

The article outlines points to the collateral cost of of an erosion of confidence from shareholders, customers and employees. This creates a downturn in engagement and subsequent productivity. Employees who have to work harder to cover gaps made by bad hires (either when they leave or while they remain) become disillusioned, thus contributing to the negativity and strain on productivity. These costs are seldom factored into the standard calculation when realising the cost of a bad hire.

How to minimise the risk of bad hires

The first point to make is that eliminating any future bad hire completely is unlikely due to the immense number of variables which impact our decision making as human beings, combined with the fluidity of corporate life.

That said, you can take proactive steps to greatly reduce your risk with best practice processes which allow you to monitor and continuously improve your hiring capability, thus reducing the chance element in hiring and improving your overall hiring efficiency.

Start by benchmarking your hiring capability

The first step is to run a ‘healthcheck’ on your current talent acquisition capability (TAC). This allows you to identify the current hiring performance levels across the organisation, then prioritise and mitigate the key process risks.

At Stone we design, teach and embed those processes. We then recruit in alignment with the process and continuously improve it.

To arrange your 50 minute Talent Acquisition Capability (TAC) Review, please get in touch.