Consequences Of a Bad Hiring Decision

A decision to hire a new employee always inevitably carries an element of risk. Most large organisations will have had experience of hiring an unsuitable employee – someone who looked and sounded the part at the interview, but fell seriously short of expectations when it came to job performance. The effect of such hiring mistakes can be huge, with significant direct and indirect consequences for the company that makes the wrong decision.

Costs of Hiring the Wrong Person

New employees can fail at an organisation for any number of reasons. Often it will be failures to work well with colleagues or establish good relationships with customers that are the biggest issues, and this tends to be linked to things like a poor attitude or inability to produce the expected standard of work on deadline.

One of the biggest direct implications of hiring such an unsuitable candidate is the immediate financial one – the costs of the initial hire, added to the costs of severance and hiring a replacement a few months down the line. These costs can easily run into considerable sums of money and will rise the longer the employee is left to do a bad job in the role.

Also to be factored in is the cost of lost business and opportunities over this period. The 3-6 months wasted with a poor-fit employee could easily have been time spent with a superstar in the role, making sales, building relationships and bringing new ideas to the table.

On top of the financial costs, there is also the potential for serious internal disruption and unrest amongst other employees in the company. These employees may be forced to pick up extra work and responsibilities because of the inadequacies of their new colleagues, meaning that morale will fall, and the company may have to expend further resources rewarding previously contented staff and keeping them from jumping ship.

Finally, there is reputational damage. This is something that should not be underestimated, because any employee, even if they only occupy a role for a few months, is a representative of their company, and as such, any negative characteristics of theirs will reflect back onto their employers. This, of course, is particularly pertinent if the employee is in a customer-facing role because they will be in a position to make or break relationships with existing and potential customers.

Reasons for Bad Hiring Decisions

Sometimes it can be tempting for companies to put a poor hire down to bad luck, to shrug it off as something that ‘just didn’t work out’. In reality, there will almost always be shortcomings in the hiring process that cause such mistakes to happen.

Sometimes it will be the case that candidates are not interviewed or vetted properly, leading to assumptions being made about their suitability for a role. For example, assuming that a candidate will fit a role because they have held similar positions in the past is dangerous, because it does not take into account the differences in culture, environment and working practices from one business to another. It can be hard to know what to do when you’ve made the wrong hiring decision.

Given the enormous costs involved in dealing with a hiring mistake, it makes sense to invest in making your hiring process as watertight as possible to minimise the chances of mistakes and incorrect assumptions being made in the first place. This is where a retained search firm comes in. They can use their experience and expertise to look beyond the list of skills on a CV and actually assess the person behind it, ensuring nothing is left to chance, and the right individual is hired for the job the first time around.

With retained searches, Oakstone delivers additional qualification tools such as balanced scorecards and detailed candidate profiles, plus thorough qualification from in-depth 1st stage interviews.

These factors lead to significantly improved results, quality, and the minimisation of touch points by the client, avoiding much of the hassle and general stress that can be caused in the process of finding the best people.

The added value and time savings derived from the input from an experienced, professional firm will pay for the investment time and again.

How do you recover from a bad hiring decision?

There are many things you can do to prevent a bad hire, including working with great recruitment partners, conducting multiple interviews, taking references and the list goes on. If you have a great recruitment process, it’s unlikely you’ll make a bad hiring decision, however, it's never impossible.

You may have noticed your new team member isn’t fitting in with your culture or their performance is lacklustre, what next?

Concluding that a bad hiring decision has been made can be extremely difficult for hiring managers and organisations. Not only is a hiring mistake costly but it can be a real blow to a hiring manager's confidence in their hiring abilities.

Recognising that a mistake has been made and taking swift action are the most important first steps. Unfortunately, many organisations don’t take swift action and let poor performance slide in the hope it will correct over time, leading to increased expense and potential negative impact on team morale and productivity.

Take these 5 steps to recover from a bad hire and prevent it from happening again.

1. Determine why they are a bad hire

Before you take action, determine why the employee isn’t working out.

• Is it a cultural fit?

• Did the hiring manager not qualify the person correctly?

• Did the employee misrepresent their expertise?

• Did you rush the hiring process and overlook potential red flags?

• Have they not had a thorough onboarding process?

• Are they receiving the support and training they need?

Whatever the reason, once you know why the employee seems like a mistake, you can take the right steps to fix the issue or decide whether termination is the best route to take.

2. Communication is key

As with most issues, communication is key to resolving issues. As a hiring manager, you should regularly meet with your new employee to offer training and support where needed; however, these meetings are also the perfect chance for you to express your feelings when it comes to their performance and cultural fit.

Ask what they think about the company and the position, as they may feel the same, and you can find a solution together.

3. Consider whether they are best suited to a different role

What if you’ve hired someone who is a great cultural fit but is having issues adapting to their new role? Skills can usually be taught, so don’t be too quick to dismiss them.

Cultural fit can be hard to find in today's competitive job market, and if they have genuine potential, assigning them a new role can be much less costly than restarting the hiring process.

If you decide that moving your new employee into a different role is the best course of action, pair this with a performance improvement plan so you can document their progress. This not only shows you have made an effort to help your employees be successful but will also highlight whether you’ve made the right decision moving them into a different role or whether termination is the next best action to take.

4. Let your mission guide your decision

The decision to keep or remove a bad hire is not always clear. When in doubt, think about the bigger picture and the direction you want your company to go in. Your mission, vision and values should drive every decision you make including when considering what to do with a potential hiring mistake. Behaviour, skills and cultural fit need to be aligned in every employee.

Don’t sacrifice your business to avoid making tough decisions.

5. Know when to let them go

There will be instances when bad hires just aren’t salvageable. If you have tried everything to save the hire and it’s just not working, it’s time to think about letting them go.

Here are a few reasons that termination may be the only solution

• The employee completely misrepresented his or her skills. This could be cause for immediate dismissal.

• The employee has excellent skills but is a terrible team player.

• The employee consistently shows disrespect and a lack of commitment to the organisation by not following basic company policies, despite repeated warnings.

• Investing in the employee would cost more money and take more time than your company can realistically afford.

Acknowledging you’ve made a bad hire is a painful realisation. But if you act wisely and quickly, you can make the best of a bad situation and avoid making future hiring blunders.