Consequences Of a Bad Hiring Decision

A decision to hire a new employee always carries an element of risk. Most large organisations will have had experience hiring an unsuitable employee – someone who looked and sounded the part at the interview but fell seriously short of expectations regarding 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, failures to work well with colleagues or establish good relationships with customers are the most significant 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 most significant implications of hiring such an unsuitable candidate is the immediate financial one – the initial hire costs added to the costs of severance and hiring a replacement a few months later. These costs can quickly run into considerable sums of money and will rise the longer the employee is left to do a bad job in the role.

Also 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, making sales, building relationships and bringing new ideas.

On top of the financial costs, there is also the potential for severe 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 should not be underestimated because any employee represents the company, even if they only occupy a role for a few months. As such, their negative characteristics will reflect back onto their employers. This is particularly pertinent if the employee is in a customer-facing role because they can 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.

Sometimes, candidates are not interviewed or vetted correctly, 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 errors 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 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, detailed candidate profiles, and thorough qualification from in-depth 1st stage interviews.

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

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

How do you recover from a bad hiring decision?

You can do many things to prevent a bad hire, including working with great recruitment partners, conducting multiple interviews, taking references, etc. If you have a great recruitment process, you'll be unlikely to make a bad hiring decision; however, it's never impossible.

You may have noticed your new team member doesn't fit 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. A hiring mistake is costly and 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, hoping it will correct over time, leading to increased expense and potential negative impact on team morale and productivity.

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

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?

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

Communication is key

As with most issues, communication is key to resolving problems. 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 to express your feelings regarding 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.

Consider whether they are best suited to a different role

What if you've hired someone who is a tremendous cultural fit but has 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 shows you have made an effort to help your employees succeed and 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.

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. 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 must be aligned with every employee.

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

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 not working, it's time to consider letting them go.

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

• The employee completely misrepresented their skills. This could be cause for immediate dismissal.

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

• The employee consistently disrespects and lacks 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 future hiring blunders.