Hiring Employees

What Really Happens When You Hire the Wrong Candidate

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No business owner wants to hire the wrong person for a job. Not only because they'll need to find a replacement candidate sooner than they'd like but also because making a bad hire drains energy and time and can cost a business in a number of ways.

When you hire the wrong person, you'll likely find yourself looking for ways to reassign the employee or working tirelessly to fit him or her into the organization in some way. Rather than simply letting the employee go, you’ll owe it to him or her to spend time and money on training and ongoing performance review. Eventually, he or she may become an adequate employee for your business, but there’s also a chance that he or she won't work out.

Either way, they're a drain on resources. Here's how. 

Related: Why Texting is the New Email in the Hiring Process

Productivity costs 

While you and your managers are spending time trying to train and retrain the new hire or manage personality conflicts between the new hire and existing staff, your business will suffer.

All that time spent on the new hire will drain productivity. Thirty-nine percent of chief financial officers surveyed by Robert Half International said that bad hires had cost them productivity, and 11 percent said a bad hire resulted in fewer sales. They also said that supervisors spend 17 percent of their time -- which is about one day per week -- managing poorly performing employees.

Financial costs

You're not only paying a salary to someone who may not be performing to your expectations, but you might also be paying for additional training. And if you end up having to let the employee go, you may be responsible for severance pay, not to mention the costs you'll incur to conduct another employee search and hire another replacement.

In the Robert Half survey, 41 percent of hiring managers and HR professionals who have made a bad hire estimated the financial costs of that hire in the thousands of dollars. And the U.S. Department of Labor estimates that the cost of a bad hire can equal 30 percent of the employee’s potential first-year earnings.

Related: There's a Big, Untapped Pool of Potential Tech Talent Out There

Employee morale costs

As you are spending your time and money trying to correct your mistake of hiring the wrong person, the rest of your team may become dissatisfied or disengaged.

It’s difficult to stay upbeat when one team member requires so much attention or manages to bring the whole team down. Ninety-five percent of financial executives surveyed by Robert Half International said that making a bad hire at least somewhat effects the morale of the team, and 35 percent said a poor hire greatly influences employee morale.

In many cases, bad hires do not get along with other employees, which can cause additional problems for the cohesiveness of your team.

Reputation costs

In today’s world of transparency, job seekers are connected to information 24/7 and can easily suss out what is and isn’t working at your company -- based on reviews from employees themselves. If you have a bad hire in the mix, you should monitor your reputation closely to make sure this individual isn’t causing a bad experience for the rest of your team.

Rather than losing all the time and money associated with making a bad hire, the next time you need to recruit, take your time and ensure you’re getting the right person. Monitor your online reputation closely to see what others have said about your work environment, and be candid about what your company needs to work on during the interview process. 

And make sure you’re managing expectations up front so that your hires don’t have any buyer’s remorse when they begin working for you. 

Related: Why the First Interview Should Never Be the Last